Ar-Rahnu Credit Scheme Well Received

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Yayasan Bina Upaya Ar-Rahnu, Yayasan Bina Upaya Darul Ridzuan (YBU)Yayasan Bina Upaya Ar-Rahnu Sdn Bhd, a subsidiary of Yayasan Bina Upaya Darul Ridzuan (YBU), is making headway, insofar as its pawn operations are concerned. The entity’s joint venture with Ar-Rahnu Bank is bearing dividends as more and more Perakeans are coming out in support of the credit scheme that the company offers. The venture has the blessing of Yayasan Pembangunan Ekonomi Islam Malaysia (YaPEIM).

“If the current trend continues there’s every possibility our reserve will breach the RM8 million mark by year’s end,” said Khairul Azwan Harun, YBU’s Deputy Chairman to reporters recently. His statement is based on developments that have taken place since the company’s inception eight months ago.

The method employed is simple and is targeted at the lower income group who have little or no recourse to the banking system, as their credit ratings are poor. Instead of resorting to ah longs (loan sharks) they can seek the assistance of Yayasan Bina Upaya Ar-Rahnu Sdn Bhd to get the capital they require for their business concerns. They need only pawn their gold and pay a premium for the metal’s safekeeping.

“The rates are low while the payout is good,” said Khairul. “RM100 worth of gold will give the owner RM65 worth of credit.” The company charges RM0.50 a month for gold worth less than RM800. Gold worth between RM801 to RM2,000 will cost the owner a monthly payment of RM RM0.65 while those in excess of RM2,000, a charge of RM0.75 is levied.

The success of the Ar-Rahnu credit scheme has prompted the state government to provide additional funding to the foundation. “The MB has approved an allocation of RM5 million recently,” said Khairul.

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