TY  - JOUR
T1  - The Ability of Al-Rahn Scheme and Conventional
Pawnbroking to Guarantee Security of Gold as Collateral
AU - Zakaria, Zamzuri AU - Zain, Mat Noor Mat AU - Yaacob, Salmy Edawati AU - Latif, Rosliza Abdul 
JO  - International Business Management
VL  - 7
IS  - 6
SP  - 426
EP  - 431
PY  - 2013
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2013.426.431
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2013.426.431
KW  - gold
KW  -conventional Pawnbroking
KW  -Al-rahn scheme
KW  -collateral safety
KW  -Malaysia
AB  - Al-rahn scheme or Islamic Pawnbroking and conventional Pawnbroking play significant 
  role in helping people for getting short-term loan easily, quickly and at affordable 
  rate. However, based on the type of complaints received by the ministry of housing 
  and local government and also by the National Consumer Complaints Centre, there 
  are common mistakes committed by the pawnbrokers related to the collaterals 
  safety which could lead to customers losses. Therefore, this study aims to compare 
  the ability of Al-rahn scheme and conventional Pawnbroking to guarantee security 
  of the gold as collateral. The basic criterias in measuring the ability of both 
  institutions are protection insurance compensation payment for loss or damage 
  of the collaterals license authorization to running Pawnbroking business and 
  auction notice procedures. The approach used are library research and interview. 
  The study found that both Al-rahn scheme and conventional Pawnbroking are capable 
  in ensuring the security of the collaterals for taking insurance and operating 
  with a valid license. However, Al-rahn schemeis better for customer for its 
  more fairer compensation which is calculated based on the amount remaining after 
  deducting the amount ofthe loan and keeping charges before loss occurs regardless 
  ofany reason. Where as for conventional Pawnbroking, compensation valueis calculated 
  as a quarter more than the amount of loan given. In addition, the auction notice 
  procedures of Al-rahn schemeis more clearer and effective which is customer 
  will be notified about the auction of the unredeemed collateral regardless of 
  the loan amount through official letter, phone calls or short messaging services 
  before the expiry of the maximum 10 months. If thesale price exceeds the amount 
  of loan, the institution will refund the excess to the pawner. Meanwhile for 
  conventional Pawnbroking, only collateral for a sum exceeding RM 200.00, customer 
  will be notified by registered letterat least 10 days before the auction date. 
  Collateral that are less RM 200.00 will be owned by Pawnshop automatically. 
  Usually customers are not informed of the auction as Pawnbrokers does not auction 
  the goods off and takes possession of the goods instead. There were also complaints 
  that Pawnbrokers do not return the surplus to the pawners after the goods have 
  been auctioned off.
ER  -