Drivers of Ar-Rahnu (pawn) acceptance: Malaysian evidence

• Main Authors: Mohd Thas Thaker, Hassanudin, Khaliq, Ahmad, Mohd Thas Thaker, Mohamed Asmy, Allah Pitchay, Anwar, Sakaran, K. Chandra
• Format: Article
• Language: English; English
• Published: Emerald Publishing Limited 2020
• Subjects: H Social Sciences (General)
• Online Access: http://irep.iium.edu.my/92104/1/92104_Drivers%20of%20Ar-Rahnu%20%28pawn%29%20acceptance.pdf; http://irep.iium.edu.my/92104/2/92104_Drivers%20of%20Ar-Rahnu%20%28pawn%29%20acceptance_SCOPUS.pdf; http://irep.iium.edu.my/92104/; https://www.emerald.com/insight/content/doi/10.1108/JIMA-08-2019-0161/full/html; https://doi.org/10.1108/JIMA-08-2019-0161

Abstract Purpose – The purpose of this paper is to examine the factor persuading the acceptance of Islamic pawn broking (Ar-Rahnu) among Islamic bank customers. Design/methodology/approach – The authors collected the data using a self-administered questionnaire design and analysed using SPSS Statistics and smart partial least square. The study is restricted to only respondents who are based in the area of Klang Valley (Selangor and Kuala Lumpur), as these two areas have a larger number of Islamic banks and a decent number of Islamic banks’ clients. A total of 381 respondents’ responses are used for this study, and the constructs involved for analysis purpose are affect, social factor, facilitating conditions, perceived !nancial bene!ts and perceived risk constructs. Findings – The !nding suggests a signi!cant positive association for social factor and perceived risk, while negative association learnt for affect on acceptance of Ar-Rahnu !nancing. On the same note, the facilitating condition and perceived !nancial bene!t are found insigni!cantly related. Practical implications – The !ndings generated from this study are expected to enrich the literature on the body of knowledge, as it has served to broaden the understanding of the Ar-Rahnu acceptance level in Malaysia. As mentioned, there is limited literature available using this type of !nancing. Existing studies focus too much on conventional !nancing products such as personal !nancing, credit card, short-term loan and many others. Less attention is given to Ar-Rahnu !nancing. Thus, this study expected to add value to the literature available in the context of Islamic pawn broking business. Moreover, the !ndings of this study will be very helpful for the Islamic !nancial institutions to !nd the best way to retain Ar-Rahnu clients and encourage more client to choose Ar-Rahnu as a mode of !nancing. Originality/value – This study owns greater potential to assist Islamic !nancial institutions to discover the best techniques to retain and encourage the grander number of clients for Ar-Rahnu as a mode of !nancing.