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.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Johari, M. S., & Sanusi, N. A. (2007, August 29–30). Prestasi Perkhidmatan ar-Rahnu: Kajian Kes MGIT. In Proceedings of the National Seminar in Islamic Banking and Finance: Islamic Wealth Management, Prospects, Issues and Challenges, Selangor, Malaysia.
Shanmugam, B. (1991). The business of pawn broking in West Malaysia. Journal of Southeast Asia Business, 7(2), 80–89.
Amin, H., & Chong, R. (2011). Determinants for ar-Rahnu usage intentions: An empirical investigation. African Journal of Business Management, 5(20), 8181–8191.
Mansor, F. (2006). Ar-Rahn: Kelebihannya Berbanding Pajak Gadai Konvensional. In A. M. A. Ghani & F. Mansor (Eds.), Dinamisme Kewangan Islam Di Malaysia. Kuala Lumpur: Penerbit Universiti Malaya.
Sam, M. F. M., Tahir, M. N. H., & Latif, N. K. A. (2010). The awareness and the acceptance of Islamic pawnshops. International Journal of Research and Reviews in Applied Sciences, 2(2), 117–125.
Appannan, S., & Doris, G. (2011, March 14–16). A study on Islamic pawn broking awareness and factors influencing the scheme in Sungai Petani Kedah. In Proceedings of the 2nd International Conference on Business and Economic Research (ICBER), Langkawi, Malaysia.
Othman, A., Hashim, N., & Abdullah, S. (2012, March 12–13). Customer satisfaction levels of service quality at ar-Rahnu, Kelantan. In Proceedings of the 3rd International Conference on Business and Economic Research (3rd ICBER), Bandung, Indonesia.
Amin, H., Chong, R., Dahlan, H., & Supinah, R. (2007). An ar-Rahnu shop acceptance model (ARSAM). Labuan e-Journal of Muamalat and Society, 1, 82–94.
Bhatt, P., Sinnakkannu, J. (2008). Ar-Rahnu (Islamic pawning broking) opportunities and challenges in Malaysia. In Peer reviewed paper in 6th International Islamic Finance Conference. Retrieved December 17, 2012, from http://kantakji.com/fiqh/Files/Markets/B106.pdf
Skully, M. S. (2005, November 17). Islamic pawnbroking: The Malaysian experience. In Proceedings of the 3rd International Islamic Banking and Finance Conference, Kuala Lumpur, Malaysia.
Adnan, M. H. (2004). Pajak Gadai dari Sudut Pengguna. In Proceedings of the Konvensyen Ar-rahnu Serantau 2003/2004, Kuala Lumpur, Malaysia.
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.
Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behavior: An introduction to theory and research. Reading: Addison-Wesley.
Amin, H., Ghazali, M. F., & Supinah, R. (2010). Determinants of Qardhul Hassan financing acceptance among Malaysian bank customers: An empirical analysis. International Journal of Business and Society, 11(1), 1–16.
Taib, F. M., Ramayah, T., & Razak, D. A. (2008). Factors influencing intention to use diminishing partnership home financing. International Journal of Islamic and Middle Eastern Finance and Management, 1(3), 235–248.
Amin, H., Abdul Rahman, A. R., Sondoh, S. L., Jr., & Ang, M. C. H. (2011). Determinants of customers’ intention to use Islamic personal financing: The case of Malaysian Islamic banks. Journal of Islamic Accounting and Business Research, 2(1), 22–42.
Haque, A., Rahman, S., & Ahmad, I. S. (2011). Factors influencing purchase of foreign goods by Malay Muslim consumer: A structural equation modeling approach on religiosity and ethnocentrism perspectives. The Social Sciences, 6(6), 420–428.
Haque, A., Rahman, S., & Haque, M. (2011). Religiosity, ethnocentrism and corporate image towards the perception of young Muslim consumers: Structural equation modeling approach. European Journal of Social Sciences, 23(1), 98–108.
Okumus, H. Ş. (2005). Interest free banking in Turkey: A study of customer satisfaction and bank selection criteria. Journal of Economic Cooperation, 26(4), 51–86.
Mohammed, N., Daud, N. M. M., & Sanusi, N. A. (2005, August 29–30). Analisis skim ar-Rahnu: satu kajian perbandingan dengan pajak gadai konvensional. In Proceedings of the Seminar Kewangan dan Ekonomi Islam: Pengukuhan dan Transformasi Ekonomi dan Kewangan Islam, Selangor, Malaysia.
Garbarino, E., & Johnson, M. S. (1999). The different roles of satisfaction, trust, and commitment in customer relationships. Journal of Marketing, 63(2), 70–87.
Wang, J. S. (2009). Trust and relationship commitment between direct selling distributors and customers. African Journal of Business Management, 3(12), 862–870.
Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2000). Consumer trust in an internet store. Information Technology and Management, 1(1–2), 45–71.
Metwally, M. (1996). Attitudes of Muslims towards Islamic banks in a dual-banking system. American Journal of Islamic Finance, 6, 11–17.
Metawa, S. A., & Almossawi, M. (1998). Banking behavior of Islamic bank customers: Perspectives and implications. International Journal of Bank Marketing, 16(7), 299–313.
Sekaran, U. (2003). Research methods for business: A skill building approach. New York: John Wiley & Sons.
Elifson, K. W., Runyon, R. P., & Haber, A. (1998). Fundamental of social statistics. New York: McGraw Hill.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer Science+Business Media Singapore
About this paper
Cite this paper
Koe, WL., Rahman, N.Z.A. (2014). The Use of Ar-Rahnu by Islamic Bank Customers in Malaysia. In: Kasim, A., Wan Omar, W., Abdul Razak, N., Wahidah Musa, N., Ab. Halim, R., Mohamed, S. (eds) Proceedings of the International Conference on Science, Technology and Social Sciences (ICSTSS) 2012. Springer, Singapore. https://doi.org/10.1007/978-981-287-077-3_2
Download citation
DOI: https://doi.org/10.1007/978-981-287-077-3_2
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-287-076-6
Online ISBN: 978-981-287-077-3
eBook Packages: Humanities, Social Sciences and LawSocial Sciences (R0)