A comparison between ar-rahnu and conventional pawn broking: a study in Klang Valley / Muhammad Kamarulzaman Omar

According to Utusan despite the existence of Islamic mortgage institutions, there is have a society today, especially Muslims who deal with non-Muslim mortgage institutions(2010). Islamic pawn shops have faced several challenges in their daily operations. According to S. Hisham, S. Abdul Shukor, A.B. Ummi Salwa and Kamaruzaman Jusoff (2013) first, although Ar-Rahnu is seen as a source of capital for many activities, customers still prefer to patronize the conventional pawn shop or lend money from illegal source such as 'Ah Long'. The purpose of this research is to study the operational system and framework between Ar-Rahnu and conventional pawn broking. The research also aims to determine factors influencing customers to practice Ar-Rahnu and conventional pawn broking. Lastly, is to give solutions and recommendation to improve Ar-Rahnu and conventional pawn broking in Malaysia. The Research method use in this research is qualitative by using interview and library sources. Besides, the comparison operational system that can see between Ar-Rahnu and conventional Pawn broking is from their services, method of payment and pledge item. In this research also know what the factors influencing customer to use Ar-Rahnu and What the Factors Influencing customer to use conventional pawn broking. Last but not least, there are few recommendations for improve both of institutions Ar-Rahnu and Conventional Pawn broking.