Ar-Rahnu acceptance and its determinants : case study of Permodalan Kelantan Berhad

Abstract

This study sought to identify the vital factors that influence the acceptance of Islamic pawn broking services (Ar Rahnu) in Malaysia, which is perceived to be a pioneer among pawn brokers in the country. This study examines two main factors that influence customer acceptance towards Islamic pawn broking offered by Permodalan Kelantan Berhad in the state of Kelantan. The two variables that were identified to influence customer acceptance of Islamic pawn broking services provided by PKB were the Shariah View and Marketing. Using questionnaires as a data collection method, in addition to interviews with top management, a set of 180 questionnaires were personally distributed among Ar Rahnu PKB customers in the city of Kota Bharu. Out of 180, 168 questionnaires were returned and deemed usable, therefore yielding a response rate of approximately 93 per cent. Data analysis methods of frequency and descriptive analysis showed that both Marketing and Shari’ah View displayed the highest mean scores, indicating that both criteria fulfilled customers’ motivations in choosing Islamic pawn broking as medium to pawn their jewelleries and to generate capital. Findings are complimentary with the hypotheses formulated based on previous studies and are useful to strengthen the pawn broking system in Malaysia. The identified variables have to be improved so that it may increase the number of customers in accepting Ar-Rahnu and in turn attract potential customers to adopt services that operate based on Islamic elements.