In Search of Technology Interruption on the Acceptance and Financial Performance of Ar-rahnu Cooperative in Malaysia

Nik Hadiyan  Nik Azman; Mohamad Rasydi  Abd Rashid; Ahmad Faizal  Ahmad Shaarani; Ju Samsuddin  Safian; Asha’ari Arshad; Nur Afifah Izati  Mokthar

The advancement of technology served as a wake-up call to the world about the importance of technology adoption. Technology is gradually becoming the new norms that must be followed by everyone. Ar-rahnu is embracing digitalization as well. Ar-rahnu is an Islamic social financing instrument that can be used to fund the initiatives given by governments. Therefore, the intention of this study is to investigate the role of technology in the relationship between ar-rahnu acceptance and financial performance. 455 questionnaires were distributed comprising 332 operated by individual co-operatives (non-franchisees), 52 operated as Permodalan Kelantan Berhad (PKB) franchisees, and 72 operated as Rakyat Management Systems (RMS) franchisees. However, 308 completed copies of the questionnaires were returned and used for analyse. The data then analyse using IBM SPSS and partial least squares-structural equation modelling (PLS-SEM) SmartPLS 3.2. This study found that, shari’ah compliance, locality, margin value and safekeeping fees has positive relationship towards financial performance. In fact, technology also moderate the relationship between acceptance and financial performance which indicate that the use of technology can improve the profitability of ar-rahnu operations. Therefore, it is imperative that every ar-rahnu co-operative continues to emphasise its acceptance factors, especially shariah-compliance as it is a pre-requisite for the sustainability of its business.

Abdul Hamid, M., Abdul Rahman, I., & Abdul Halim, A. N. (2014). Factors Affecting the Acceptance on Ar-Rahnu (Islamic Based Pawn Broking): A Case Study of Islamic Banking in Malaysia. The Multidisciplinary Journal of Global Micro trends, Macro theme Review, 3(4), 22-35
Abdul Khir, M. F., Badri, M. B., & Hussain, L. (2013). Critical Appraisal of Rahn-based Islamic Microcredit Facility From Shari’ah Perspective. Advances in Natural and Applied Sciences, 7(3), 221-231
Abdul Razak, A. (2011). Economic and Religious Significance of the Islamic and Conventional Pawnbroking in Malaysia: Behavioural and Perception Analysis (Doctoral dissertation, Durham University).
Abu Bakar, T., Ali, M. A., Omar, R., Som, M. H., and Muktar, S. N. (2013). Women’s involvement in entrepreneurship in Johor: a study about critical success factors in achievement and failure in handling business. Project report. FPPSM: UTM.
Amin, H. (2011). Modelling Ar-Rahnu Use in Eastern Malaysia: Perspectives of Muslimah. Journal of Islamic Economics, Banking and Finance, 7(3), 63-76.
Amin, H., Chong, R., Dahlan, H., & Supinah, R. (2007). An Ar-Rahnu shop acceptance model (ARSAM). Labuan E-journal of Muamalat and Society, 1, 82-94.
Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological bulletin, 103(3), 411.
Baharum, N. N. (2014). Factors of customer's intention to use Ar-Rahnu at Post Office: A case study in Kedah (Dissertation, Universiti Utara Malaysia).
Brigham, E. F., & Ehrhardt, M. C. (2010). Financial Management Theory and Practice. 13th Edn., South-Western Cengage Learning, Mason, OH, ISBN: 1439078106, pp: 1184.
Cheah, S. L. Y., Ho, Y. P., & Li, S. (2021). Search strategy, innovation and financial performance of firms in process industries. Technovation, 105, 102257.
Creswell, J. W. (1994). Research Design: Qualitative and Quantitative Approaches. Thousand Oaks: Sage Publications.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS quarterly, 319-340.
Hair Jr, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research. European business review.
Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, S. P. (2017). Advanced issues in partial least squares structural equation modeling. saGe publications.
Hair, J. F., Black, W. C., Babin, J. B., & Anderson, E. R. (2010). Multivariate data analysis. Upper Saddle River; New Jersey, Pearson Education, Inc.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
Hasan, F. S., Almubarak, M. M. S., & Ahmed, A. (2016). Factors influencing women entrepreneurs’ performance in SMEs. World Journal of Entrepreneurship, Management and Sustainable Development.
Hassan, N., Suan Chin, S. T., Yeow, J. A., & Mohd Rom, N. A. (2011). Financial constraints and opportunities of micro entreprise entreprenuers: A Theoretical Framework, International Conference on Business and Economics Research, 1, 165-168
Hisham, S., Shukor, S. A., Salwa, A. U., & Jusoff, K. (2013). The concept and challenges of Islamic pawn broking (ar-rahnu). Middle-East Journal of Scientific Research, 13(13), 98-102.
Ismail, A. G., & Ahmad, N. Z. (1997). Pawnshop as an instrument of microenterprise credit in Malaysia. International Journal of Social Economics, 24(11), 1343-1352
Ismail, A. G., & Sanusi, N. A. (2005, May). A framework for regulating pawnshops: Why do, what area and Syariah view. In Proceedings of Malaysian Finance Association (MFA)’s 7th Annual Conference (pp. 9-10).
Ismail, A. G., & Ahmad, N. Z. (1997). Pawnshop as an instrument of microenterprise
Johari, M. S., Sanusi, N. A., and Rais, B. M. I. (2007), The Demand of Pawnbroking Services: Evidence from Malaysia.
Jung, S., Nam, C., Yang, D. H., & Kim, S. (2018). Does corporate sustainability performance increase corporate financial performance? Focusing on the information and communication technology industry in Korea. Sustainable Development, 26(3), 243-254.
Lucas, J. H. C., & Spitler, V. K. (1999). Technology use and performance: A field study of broker workstations. Decision sciences, 30(2), 291-311.
Mazzarol, T., Limnios, E. M., & Reboud, S. (2011, December). Co-operative enterprise: A unique business model. In Paper submitted for the Australia and New Zealand Academy of Management (ANZAM) Annual Conference, Wellington.
Mohammed, N., Daud, N. M. M., & Sanusi, N. A. (2005, August). Analisis skim ar-Rahnu: Satu kajian perbandingan dengan pajak gadai konvensional. In Prosiding Seminar Kewangan dan Ekonomi Islam: Pengukuhan dan Transformasi Ekonomi dan Kewangan Islam (pp. 29-30).
Muhamad, H., San, O. T., Katan, M. B. H., & Ni, S. W. (2019). Factors That Influence the Customers’ Perception towards Ar-Rahnu (Islamic Pawn Broking Product) in Selangor, Malaysia. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(2), 126-137.
Muhammadin, A., Er, A. C., & Ishak, S. (2015). Teknologi Maklumat, strategi pembezaan dan prestasi kewangan industri perbankan di Indonesia. Geografia-Malaysian Journal of Society and Space, 11(4), 74-86.
Azman, N. H., & Kassim, S. H. (2017). Ar-Rahnu as a Source of Financial Sustainability for Women Micro-Entrepreneurs in Malaysia. Journal of Islamic Monetary Economics and Finance, 2(2), 221-250
Azman, N. H., & Kassim, S. H. (2017). Pricing practices of ar-rahnu providers in Malaysia. Middle East Journal of Management, 4(1), 84-96.
Azman, N. H., Kassim, S., & Adeyemi, A. A. (2016). Role of Ar-Rahnu as Micro-Credit Instrument in Achieving Financial Self-Sufficiency among Women Micro-Entrepreneurs. Intellectual Discourse, 24(3).
Azman, N. H., Kassim, S., & Adeyemi, A. A. (2018). Analysing ar-rahnu in the context of informal credit market theory: Evidence from women micro-entrepreneurs in Malaysia. ISRA International Journal of Islamic Finance.
Azman, N. H., Zabri, M. Z. M., Masron, T. A., & Malim, N. A. K. (2020). The Adoption of Ar-Rahnu and Financial Wellbeing of Micro-entrepreneurs in Malaysia. International Journal of Academic Research in Business and Social Sciences, 10(6), 36–53
Nurfaizah, F. C. (2021). Implementasi Strategi Islamic Marketing Mix Pada Kokumi Transmart Rungkut Surabaya. Jurnal Ekonomika dan Bisnis Islam, 4(1), 172-185.
Oshoke, A. S., & Sumaina, J. (2015). Performance evaluation through ratio analysis. Journal of Accounting and Financial Management, 1(8), 1-10.
Othman, A., Hashim, N., Abdullah, S., & Perniagaan, K. (2013). Perkembangan Ar-Rahnu Di Terengganu: Kajian Kes Terhadap Ar-Rahnu Majlis Agama Islam Dan Adat Melayu Terengganu (MAIDAM). Prosiding Perkem Viii, 951-59.
Purwanto, Y., Taufik, M., & Jatnika, A. W. (2017). Peran teknologi informasi dalam perkembangan dakwah mahasiswa. Jurnal Sosioteknologi, 16(1), 94-109.
Ramayah, T., Yeap, J. A., Ahmad, N. H., Halim, H. A., & Rahman, S. A. (2017). Testing a confirmatory model of Facebook usage in SmartPLS using consistent PLS. International Journal of Business and Innovation, 3(2), 1-14.
Ringle, C., Da Silva, D., & Bido, D. (2015). Structural equation modeling with the SmartPLS. Bido, D., da Silva, D., & Ringle, C.(2014). Structural Equation Modeling with the Smartpls. Brazilian Journal Of Marketing, 13(2).
Saleh, A. S., & Ndubisi, N. O. (2006). An evaluation of SME development in Malaysia. International review of business research papers, 2(1), 1-14.
Salleh, B. (2014). Faktor-faktor yang mempengaruhi kesedaran usahawan kecil muslim terhadap skim Ar-Rahnu (pajak gadai Islam). Masters thesis, Universiti Utara Malaysia.
Schrader, H. (2000). Pawnshop customers in Saint Petersburg: data analysis of a survey in spring 1999.
Sexton, R. J., & Iskow, J. (1993). What do we know about the economic efficiency of cooperatives: an evaluative survey. Journal of Agricultural Cooperation, 8(1141-2016-92584), 15-27.
Shah, A. A., & Yaacob, S. E. (2018). Cabaran dan Alternatif Penyelesaian bagi Penyedia Perkhidmatan Ar Rahnu di Malaysia. UMRAN-International Journal of Islamic and Civilizational Studies, 5(1), 31-43. DOI: 10.11113/umran2018.5n1.185
Suhana, M., Sham, R., Jaffar, H. H., Latif, R. A., Zaharum, Z., Abidin, R. A. Z., & Omar, N. (2016). The acceptance of ar-rahnu scheme among rural population. In Regional Conference on Science, Technology and Social Sciences (RCSTSS 2014) (pp. 663-673). Springer, Singapore.
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management science, 46(2), 186-204.
Zhongming, Z., Linong, L., Xiaona, Y., Wangqiang, Z., & Wei, L. (2019). Confronting cyber threats to businesses and personal data. Global S&T Development Trend Analysis Platform of Resources and Environment.

In-Text Citation: (Azman et al., 2022)
To Cite this Article: Azman, N. H. N., Rashid, M. R. A., Shaarani, A. F. A., Safian, J. S., Arshad, A., & Mokthar, N. A. I. (2022). In Search of Technology Interruption on the Acceptance and Financial Performance of Ar-rahnu Cooperative in Malaysia. International Journal of Academic Research in Business and Social Sciences, 12(5), 1206 – 1223.

Copyright: © 2022 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non0-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

In Search of Technology Interruption on the Acceptance and Financial Performance of Ar-rahnu Cooperative in Malaysia

Nik Hadiyan Nik Azman, Mohamad Rasydi Abd Rashid, Ahmad Faizal Ahmad Shaarani, Ju Samsuddin Safian, Asha’ari Arshad, Nur Afifah Izati Mokthar

Further Information

Our Journals

Get intouch with us