Ar-Rahnu Scheme Sme Pawnshop Summery

Conclusion

        In conclusion, The Islamic pawnshop (ar-rahnu scheme) is the most appropriate mechanism as it provides a financial product for the lower-income group and small businesses which usually have limited capital or have been excluded from the mainstream financial system. It can be seen that the Ar-Rahnu playing its role to assist small entrepreneurs in the SME to conduct their business management. Ar-rahnu institution that bases its claim sharia distinguishes between a pawnshop run by the conventional banking sector and business premises registered under pawn. Conventional pawn conducted high interest rate for each loan made. Conventional systems are more non-profit than helping those who have to borrow from the insistence of life Despite significant differences in terms of principles offered as rate of charge and only gold is allowed to mortgage unlike conventional justify any valuable items. It is on the basis of value in itself because gold has a value that never fell.

        The introduction of the Ar-Rahnu helps entrepreneurs of SME to acquire capital to run the business. The survey was taken through as entrepreneurial in Pasar Siti Khadijah, Kelantan visible gold jewellery owned but not for capital to do business. Many indigenous people in Kelantan which is certainly among small businesses can hold gold as a capital to run the day to day business as a source of sustenance. Ar-Rahnu is beginning to be recognized by small medium enterprise as a source of quick a convenient micro-credits. One could obtain a loan from this service provider by using her gold in any form as security. Moreover, is not only quick and easy means for cash for majority of women in lower income group bracket but over time has steadily and increasingly accepted by micro, small and medium enterprises (SMEs) to finance their businesses as instant cash will be required when ones pawn their gold or jewelleries.