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As Financial Commitments Rise, Gold Becomes a Lifeline
🇲🇾 Malaysia /Economy & Trade

As Financial Commitments Rise, Gold Becomes a Lifeline

From Utusan Malaysia · () Malay

Translated from Malay and summarized by DistantNews. Read the original for the full story.

At a glance

In-depth Named sources Context piece
  • Some middle-income Malaysians are pawning gold to cover housing, vehicle, child-related and business expenses rather than taking new loans or selling the asset.
  • Users describe gold as emergency savings that can provide temporary cash and later be redeemed when finances stabilize.
  • A Universiti Sains Malaysia scholar said al-Rahnu institutions may charge storage fees, but those fees should reflect actual costs and not resemble conventional interest.

For some middle-income Malaysians, pawning gold has shifted from a last resort to a practical way to manage rising financial commitments. Gold jewelry and savings can provide temporary cash without requiring owners to sell the asset outright.

When many commitments came at once, especially housing, car and children’s needs, there were times when I simply did not have enough cash. So I chose to pawn the gold I had instead of taking out a new loan.

— Nur Aina AbdullahShe explained why she used gold pawning to manage household expenses.

Private-sector employee Nur Aina Abdullah said she turned to gold pawning after housing, car and child-related payments arrived at the same time. Rather than take on a new loan, she chose to pledge jewelry she already owned.

Small-business owner Azman Shharin described gold as a safeguard when business cash flow slows. He said pawning allows him to access money temporarily while keeping the asset for the long term and redeeming it once his finances improve.

For me, saved gold can be a lifeline when business cash flow is slow.

— Azman ShharinThe small-business owner described pawning gold as temporary support for his business.

Jasni Sulong, an associate professor at Universiti Sains Malaysia, said gold pledged under al-Rahnu serves as collateral for a loan and should not generate profit through interest. The Islamic pawnbroking system can charge ujrah, or safekeeping fees, to cover storage, security and care of pledged items.

The institution should not profit simply because it provides a loan.

— Jasni SulongHe explained the principle he believes should guide al-Rahnu financing.

But Jasni said those charges must remain reasonable and relate to the service provided. If they rise too high, customers could face a financial burden little different from conventional pawnbroking, despite al-Rahnu’s stated purpose of helping people in need of cash.

Ujrah is not interest. It is payment for the cost of storing, securing and caring for pledged goods.

— Jasni SulongHe distinguished legitimate safekeeping charges from interest-based lending.
About this summary

Originally published by Utusan Malaysia in Malay. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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