Type of Pawnshop

2. Pegadaian Konvensional

Type of Pawnshop

1. Sharia Pawnshop

In general, what is meant by sharia pawnshops are financial institutions or divisions of the pawnshop form by providing loans to customers in accordance with Islamic sharia principles.

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Sharia principles include the following:

  • Mudharabah is financing based on the principle of equity participation.
  • Musharakah is the principle of selling goods at a profit.
  • Ijarah is the financing of capital goods based on the principle of pure lease without options.
  • Ijarah Waiqtinu is an option to transfer ownership of goods rented from the bank by another party.

The advantages of sharia pawnshops

  • Using a profit sharing system.
  • Using the sharia pawn system with sharia principles.
  • The cost of saving services is less, ie 0.8% per 10 days from the estimate.
  • Administrative costs are smaller, ie 0.27% of the loan money.

Disadvantages of sharia pawnshops

  • The weakness of the sharia pawnshop is that it still uses a manual recording system.
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2. Conventional Pawnshop

Conventional pawnshops are government institutions that provide loan money to customers on the basis of the pawn law.

Advantages of Conventional Pawnshops

  • Conventional pawnshops are widespread in many places up to villages, so they can be easily reached
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Disadvantages of Conventional Pawnshops

  • Using the interest system.
  • The cost of saving services is relatively higher.
  • The administrative costs are greater than the sharia pawnshops.
  • The remaining money from the auction of goods is taken by the pawnshop.
  • Conventional pawnshops still use a manual recording system.

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