Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Abstract

Factors Influence the acceptance of Al-Rahn among entrepreneurs

Author(s): Salimah Yahaya,Siti Syuhadah Mohamad

This study encompasses intrinsic factors to identify the acceptance of al-rahn by entrepreneurs in Kelantan. Al-rahn have become one of the important Islamic financing instruments that can provide quick and easy short-term financing, especially in current uncertain economic conditions. However, small entrepreneur's acceptance of al-rahn is still low when alrahn is said to be needed when the situation is urgent solely for business purposes. This situation sparks an interesting phenomenon on how to encourage the Muslim small entrepreneurs to accept al-rahn?  In order to achieve the objective of the study, quantitative analysis was applied using primary data from questionnaires distributed. The results of the study on 350 entrepreneurs around the state of Kelantan found that factor of understanding towards al-rahn and factor of halal and haram considerations significantly affected al-rahn acceptance. The benefit returns factor and preferential use factor were not significantly affected al-rahn acceptance.  The implication showed that small entrepreneurs have good and positive thinking about al-rahn as Islamic product based on Islamic sharia and principles. The main contribution of this study is to help small entrepreneurs to understand well the purpose of al-rahn in order to provide capital to their business. In other hands, it may help the al-rahn provider to provide better services.