There is an urgent call for a potential justification on how and to what extent customers (micro-entrepreneurs) of Ar-Rahnu institutions in Malaysia are successfully driven their living standards from B10 (hardcore poverty) to B40 (low income). This study classified Ar-Rahnu’s adoption factors into three categories, namely, Shari’ah governance, uniqueness of Ar-Rahnu, and efficiency. 150 questionnaires were distributed to micro-entrepreneurs that used Ar-Rahnu and analysed using SmartPLS 3.0. Based on the results, it shows that Shari’ah governance has a low correlation and insignificant relationship towards Ar-Rahnu adoption. Stated differently, it means that customers find Shari’ah¬-compliance requirements not as important and it does not get in their way of getting instant cash from Ar-Rahnu. The other two constructs, namely as uniqueness and efficiency, have positive relationships with Ar-Rahnu adoption. It shows a significant and positive relationship with the Ar-Rahnu financing output. Unlike previous studies within the body of knowledge that mainly focuses on the adoption factors of Ar-Rahnu, this study went a step further by addressing the after-effect or impact of Ar-Rahnu adoption towards customers’ wellbeing, especially in terms of financial wellbeing and have found positive results.
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In-Text Citation: (Azman et al., 2020)
To Cite this Article: Azman, N. H. N., 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), 31–47.
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