The role of Ar-Rahnu's benefits - Sacrifices exchange towards relationships between customers and islamic financial institutions

The first ar-rahnu (islamic pawn broking) shop was established in terengganu,malaysia in 1992. however,the role of exchange between benefits and sacrifices in ar-rahnu transaction as a determination of its development has not been given much emphasis in malaysia. therefore,this paper explores a new perspective of ar-rahnu especially focusing on its benefits and sacrifices. several studies have highlighted the benefits-sacrifices exchange (bsx) to be the determinant of customer demand. the bsx in ar- rahnu transaction proposes a new conceptual framework to investigate the effects of its usage. this paper provides a new insight into these constructs by introducing the social exchange theory (set). two hundred and six respondents were selected to answer a set of questionnaires. the factor analysis found that the dimension of benefits and sacrifices in ar-rahnu is fit to be analysed using sem using amos. this paper suggests that bsx in ar-rahnu transaction produce a significant effect on the ar-rahnu customer-pawnbroker trust and long-term relationship. © universiti putra malaysia press.