The potential of Islamic Pawn System: a study on the appropriateness on Muassasah Gadaian Islam Terengganu operation in Sabah

• Main Authors: Mohd Zulkifli Muhammad, Hanudin Amin, Mohd Faisol Ibrahim, Mohd Fahmi Ghazali, Hazmi Dahlan
• Format: Research Report
• Language: English; English
• Published: Universiti Malaysia Sabah 2010
• Subjects: HG Finance
• Online Access: https://eprints.ums.edu.my/id/eprint/23351/1/The%20potential%20of%20Islamic%20pawn%20system.pdf; https://eprints.ums.edu.my/id/eprint/23351/7/The%20potential%20of%20Islamic%20pawn%20system.pdf; https://eprints.ums.edu.my/id/eprint/23351/
• Institution: Universiti Malaysia Sabah

Purpose - The need for an Islamic pawnshop has been discussed by the researchers within in Malaysia as well as other countries (for example: Nasifah, Nor Mariana & Nur Azura, 2005; Ismail & Sanusi, 2005; Ismail, 2004; Kon Lim, 2003; Ismail & Nur Zakiah, 1997; Rugayah, 1986). The Islamic based pawnshop transaction is still overlooked in Islamic finance practices and abandoned cases for the state government of Sabah. This issue is important as it might create a greater impact in promoting Islamic financial transactions among local people in the future. Therefore, the main purpose of this study is to understand public perceptions with regard to the need of Islamic pawnshop as this would help to improve the delivery of Islamic pawnshop facilities to Sabahan especially in terms of quality of services offered along with features and procedures of the products. Design/methodology/approach - The data for the research were collected using self-administered questionnaires. Out of the 1000 prepared questionnaires, only 500 questionnaires were managed to distribute to Sabahan. Out of these numbers, only 339 questionnaires were usable for further data analysis of the data. The data were analyzed using Statistical Package for Social Science (SPSS) 17. Findings - All of the research objectives, certainly, were tested using survey data. The results indicated that, the majority of the respondents believed that there should be an introduction of Islamic pawnshop system in Sabah. The results also indicated that the respondents were support the collaboration between the states in accelerating the introduction and the development of Islamic pawnshops in Sabah. Furthermore, it is likely reported that, the majority of the respondents prefer to choose "Muasassah Gadaian Islam Sabah" or MGIS for Islamic pawnshops in Sabah. Research limitations/implications - The limitation of the study is the narrow focus on a couple of cities in addition to the limited variables used in the research instrument. Notwithstanding, the research is important to provide insights on the feasibility of establishing Islamic pawnshop system in Sabah. The findings of this study shed some lights on Sabahan perception level of Islamic pawnshop. Originality/value- This research is the first of its kind that examined Sabahan perception with regard to potential of establishing Islamic pawnshop in Sabah, which has limited previously been investigated.