The Use of Ar-Rahnu by Islamic Bank Customers in Malaysia

Abstract

Abstract Ar-Rahnu or Islamic pawnbroking acts as one of the alternatives for people to borrow money quickly with ease. As interest is prohibited in Islam, Ar-Rahnu can be regarded as a permissible choice for Muslims in the country to borrow quick cash money. It is also worth noting that Ar-Rahnu is suitable for non-Muslims as well due to its short and simple process. To date, there is an abundance of studies on various Islamic-based financial products; however, research into Ar-Rahnu still remains low. As such, this study attempts to address the issue of intention to use Ar-Rahnu among the customers of an Islamic bank. A survey comprised of 377 respondents was carried out. Based on the statistical analysis, the results indicated that factors such as attitude, social influence, religious obligation, attractive price, and trust were having significant positive correlations with intention to use Ar-Rahnu. In addition, stronger correlations were found between the last two factors and intention, as compared to the previous three. Thus, offering an attractive price and establishing trust should be put forward as main considerations in drafting marketing strategies to attract and retain customers for this particular product.