The Role of Ar-Rahn in Enhancing Financial Inclusion: A Structural Equation Modeling Approach

Azila Abdul Razak, Fidlizan Muhammad, Mohd Yahya Mohd Hussin, Zuraidah Zainol, Fatimah Salwa Abd. Hadi

Abstract


ABSTRACT

This study examines the relationship between financial inclusion and the adoption of ar-rahn financing in enhancing the well-being of its customers throughout Malaysia. Data distributed via questionnaire to 239 respondents were analyzed using descriptive and structural equation modeling. The results indicate that there is a positive relationship between financial inclusion and ar-rahn’s financing adoption. In addition, the adoption of ar-rahn among customers improves the well-being of individuals and society. This paper contributes to the existing literatures and provide new insights on how financial inclusion could increase the adoption of ar-rahn financing and consequently the individual and societal well-being.

Keywords: Financial inclusion; ar-rahn adoption; individual well-being; societal well-being.

ABSTRAK

Kajian ini menganalisis hubungan yang wujud antara inklusif kewangan dan penggunaan pembiayaan ar-rahnu dalam meningkatkan kesejahteraan pengguna seluruh Malaysia. Data yang diedar melalui soal selidik kepada 239 responden dianalisis menggunakan model persamaan struktur. Keputusan kajian menunjukkan terdapat hubungan yang positif antara inklusif kewangan dan penggunaan pembiayaan ar-rahnu. Selain itu, penggunaan pembiayaan ar-rahnu juga meningkatkan kesejahteraan individu dan masyarakat. Kajian ini menyumbang kepada literatur sedia ada dan pandangan baharu bagaimana inklusif kewangan mampu meningkatkan penggunaan pembiayaan ar-rahnu dan seterusnya kesejahteraan individu dan masyarakat.

Kata kunci: Inklusif kewangan; penggunaan ar-rahnu; kesejahteraan individu; kesejahteraan masyarakat.


Keywords


financial inclusion; financial exclusion; ar-rahn adoption; individual wellbeing; societal wellbeing

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