Determining the Wage Rate in Islamic Leasing Scheme of Selected Malaysian Financial Institution: A Requirement in Developing the Economy of Society

Abstract

This study aims to investigate the determination of wage rate in Islamic leasing scheme of selected Malaysian Financial Institution in developing the economy of Muslims. This is a qualitative study which utilises three data methods of data collection namely observation, interview and documental evidences. The data has been descriptively analysed. The findings of the study proved that majority of the Islamic pawn centre in Malaysia used three main instruments, particularly, ar-rahnu, al-qard and al-wadi'ah yad dhamanah. Thus, the wage rate for keeping the goods is based on the principle of al-wadi'ah yad dhamanah. However, the rate varied between institutions. Findings of the study revealed that the collection of wage rate can be implemented provided that the rate did not exceed one percent of every RM 100 of the marhun value. As a conclusion, the Islamic leasing or pawn services in Malaysia has significantly assisted in developing economy of Malaysian society and has been getting supports from Muslims as well as non-Muslims due to the reasonable wage rate. Among the implications of this research was the involved authority need to create special Act relating to Islamic leasing scheme because to dateis only based on the guidelines of Islamic Leasing Activities (Ar-Rahnu) issued by the Malaysian Cooperative Commission (SKM).