Keywords: Women, Micro-entrepreneurs, Self - sufficiency, Financial stability


Muslims in Malaysia had practiced ar-rahnu for fulfilling their financial need, especially for emergency purposes since early 1990s. The pioneer of ar-rahnu in Malaysia is Muassasah Gadaian Islam Terengganu (MGIT) in January 1992, followed by the Kelantan Capitalization Berhad (PKB) in March 1992. Both of these Islamic pawn centres are among the earliest exponents to the Islamic pawn scheme in Malaysia. Ar-rahnu is an increasingly popular financing option among micro-entrepreneurs in Malaysia, particularly women micro-entrepreneurs. Women micro-entrepreneurs play a vital role in the Malaysian economy and could be considered as the backbone of the industrial development in Malaysia. This study examines the role of ar-rahnu as a source of financial stability for women micro-entrepreneurs. 600 questionnaires were distributed at three states in Malaysia which are Kelantan, Terengganu and Kedah. Then, this study used SPSS and SEM Amos to analyses the data for 600 respondents (women micro-entrepreneurs) in Malaysia. In essence, this study finds that shariah compliancy, locality, service charges, collateral and customer satisfaction has positive and significant impact towards the use of ar-rahnu. The study also found use of ar-rahnu has significant impact towards financial self-sufficiency for women micro-entrepreneurs.

Author Biographies

Nik Hadiyan Nik Azman, International Islamic University Malaysia, Malaysia

Kulliyyah of Economics and Management Science,

International Islamic University Malaysia, Kuala Lumpur, Malaysia

Salina Hj. Kassim, IIUM Institute of Islamic Banking and Finance, Malaysia

Dr Salina Kassim is currently Associate Professor at the IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia (IIUM). Prior to becoming an academician, she has several years of working experience in a commercial bank in Malaysia. She teaches Money and Banking, and Islamic Banking and Finance at the under-graduate level, and Islamic Financial System, Financial Economics and Contemporary Issues in Islamic Finance at the graduate level. Her research interests include Islamic banking and finance, and monetary/financial economics. She has published extensively in refereed academic journals in her areas of research interest. Dr Salina also sits on the editorial boards of several reputable international journals. She earned her PhD in Monetary Economics in 2006 from the IIUM and her Masters and Bachelor degrees from the USA in 1992 and 1994, respectively.

Scopus ID: 32667637500


How to Cite
Nik Azman, N. H., & Hj. Kassim, S. (2017). AR-RAHNU AS A SOURCE OF FINANCIAL SUSTAINABILITY FOR WOMEN MICRO-ENTREPRENEURS IN MALAYSIA. Journal of Islamic Monetary Economics and Finance, 2(2), 221 - 250.