Chapter 10: The factors that influence the choosing Ar-Rahnu over conventional pawn shop in Pengkalan Chepa

Abstract

Ar-Rahnu, also known as Islamic pawnbroking, is a financial concept that originates from Islamic principles and is widely practised in some Muslim-majority countries. It provides a means for individuals to obtain short-term loans using their valuable possessions as collateral. The word “ar-Rahnu” is derived from Arabic, where “Ar” means “the” and “Rahnu” refers to the practice of pawning or pledging an item. The concept is based on the Islamic principles of mudarabah (profit-sharing) and qard al hasan (benevolent loan) (Abd Hamid et al., 2015; Amin & Hassan, 2022)