Ar-Rahnu or better known as Islamic pawn broking can be defined as a method of providing short-term financing to a person by pawning his or her gold to the banks or any Islamic pawnshop as a security.
How Does Ar-Rahnu Work?
- The Ar-Rahnu business module utilizes gold jewellery or gold as collateral to the loan applied by applicant.
- If the applicant is unable to repay the loan amount, his/ her collateral will be auctioned. The amount paid for the auctioned collateral will be the applicant’s repayment. If there is a balance from the auction value compared to the loan amount, the balance will be given to the applicant.
Benefits of Ar-Rahnu
- Riba' fee
- No processing fees
- Storage fees are calculated daily
- Extensive mortgage duration
- Pawned items are secured with Takaful coverage
- Flexible repayment scheme
Ar-Rahnu Around Malaysia
