REVISITING THE FIQH CHARACTERISATIONS OF THE RAHN-BASED ISLAMIC MICROCREDIT PRODUCT

The rahn-based Islamic microcredit product is an increasingly popular financing option among small entrepreneurs, lower income groups and gold traders. However, its Shar  ah structure has been sharply criticised by some Islamic scholars despite its success for those who offer it such as Islamic banks and Islamic pawnshops. Hence, it is undeniable that there are some debatable Shari’ah issues that need further examination and immediate solution. This situation is most likely a result of using the contract of rahn (pledge) in an income-generating product, which obviously contravenes the fundamental purpose of rahn.