Rahn Contract Construction as Micro, Small and Medium Enterprises (MSME) Capitalization Solutions in the Halal Industry Sector

Abstract

Many players in the halal industry do not have access to formal finance. As a result, they do not have access to capital, their business does not develop, and gradually goes out of business. This article aims to develop the concept of financing with the Rahn contract scheme. So far, the Rahn contract is only understood as an agreement in a pawnshop to obtain a certain amount of loans for consumptive purposes. This article uses a type of literature review where data is obtained from a number of publications derived from journals, books, proceedings, review results, magazines or newspapers, and other sources that are considered informative. This article argues that the Rahn contract can be developed as a capitalization solution for halal industry business units in the micro, small, and medium sectors. It further suggests the development of the function of the Rahn contract as a business capitalization contract by issuing shares as Marhun for financing media. The capitalization model with this scheme is intended to develop collateral as a means of investment.