Malaysia’s postal service moves into Islamic pawn broking

Pos Malaysia has agreed an 80/20 joint venture deal with Bank Muamalat Malaysia to provide Shari’ah finance under the Ar-Rahnu system.

The new company Pos Ar-Rahnu will offer Islamic pawn broking services in Malaysia’s network of more than 700 post offices. Pos Malaysia has acquired Bright Emerald Sdn Bhd, through which the joint venture will operate, renamed Pos Ar-Rahnu. Three of the businesses four directors will be appointed by Pos Malaysia, the bank will provide the fourth.

In a statement to investors, Pos Malaysia said its Pos Ar-Rahnu unit would be offering loans based on Shari’ah principles, as well as acting as an auctioneer or dealer in gold, silver, jewellery and other precious items.

The statement said, “The collaboration would enhance the product offering at Pos Malaysia outlets, besides providing an alternative to distribute micro credit convenience to small-time entrepreneurs who have difficulty in obtaining financing from banks.

“Pos Malaysia outlets are not only located at capital States and major towns, but also in small towns and rural areas. Hence, providing higher penetration rates not yet exploited by other players at multiple locations,” said the company.