Comparative Analysis of Sharia Pawn Systems (Rahn): Perspectives of Daud Bakar and Nejatullah Siddiqi

Abstract

This study presents a comparative analysis of the perspectives of Daud Bakar and Nejatullah Siddiqi on the Islamic pawnbroking system (rahn), focusing on their differing emphases on legal and social dimensions. Daud Bakar highlights the importance of contractual clarity, legal certainty, regulatory compliance, and product innovation to ensure that pawn practices remain fully aligned with Sharia principles. In contrast, Nejatullah Siddiqi emphasizes the social function of rahn by viewing it as an inclusive mutual-aid mechanism (qardh hasan) designed to support small communities and protect vulnerable groups. This research employs a descriptive-analytical qualitative approach based on a literature review of both scholars’ works, relevant DSN-MUI fatwas, and the operational practices of Sharia pawnshops in Indonesia. Primary data are derived from the original writings of both scholars and DSN-MUI fatwas, while secondary data include scholarly journal articles, books, and institutional reports related to Sharia financial practices. The findings indicate that Daud Bakar prioritizes legal legitimacy, contractual transparency, and institutional compliance, whereas Siddiqi emphasizes social justice, accessibility, and empowerment of the underprivileged. The study concludes that integrating these perspectives provides a comprehensive framework for Sharia-compliant pawnshops to balance regulatory compliance with socio-economic welfare, strengthening rahn as both a financial instrument and a tool for equitable community development.