NAVIGATING RISKS IN AR-RAHNU COOPERATIVES: EXPLORATION OF RISK TYPOLOGIES AND MANAGEMENT STRATEGIES
DOI:
https://doi.org/10.53840/ijiefer229Keywords:
Ar-Rahnu, Risks, Strategies, CooperativesAbstract
This study investigates the nature of risks inherent in Islamic pawn broking (Ar-Rahnu) and examines the approaches taken by Ar-Rahnu cooperatives to manage these risks. Despite the growing importance of the Ar-Rahnu cooperative as a Shariah-compliant microfinance institution, research on its risk management practices remains limited. Adopting a qualitative research approach, this study conducted in-depth interviews with senior managers and key decision-makers in Ar-Rahnu cooperatives to explore their perceptions of risk typologies and their risk mitigation strategies. The findings reveal a complex risk landscape encompassing operational, credit, market, and Shariah-related risks. In response, cooperatives have adopted diverse strategies, including strengthening internal controls, enhancing staff competencies, implementing robust Shariah governance practices, and engaging with stakeholders to ensure compliance and sustainability. This study enriches the understanding of risk management in Islamic pawn broking or Ar-Rahnu by providing empirical insights from practitioners, offering valuable implications for policymakers, regulators, and cooperative managers seeking to fortify Ar-Rahnu operations against emerging challenges.
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Copyright (c) 2025 Nor Fadilah Bahari, Zurina Shafii, Mustafa Mohammad Hanefah, Nuzul Akhtar Baharudin
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