UNDERSTANDING THE DEMOGRAPHIC PROFILES AND FINANCIAL PERFORMANCES OF AR-RAHNU COOPERATIVES OUTLETS IN MALAYSIA

Abstract

Ar-rahnu is a micro-credit mortgage financing company with a large market potential. The popularity of ar-rahnu stems from its support of cooperative principles, which enhance members financial wellbeing. The ar-rahnu financing scheme has been rapidly expanding among banking institutions and co-operatives in recent years. It is worthwhile to conduct in-depth research on the profiling of ar-rahnu cooperative outlets in Malaysia to ensure future ar-rahnu sustainability. As a result, this study employed a quantitative approach, distributing 455 questionnaires to ar-rahnu cooperative outlets in Malaysia via both online and offline means. A total of 308 completed questionnaires were returned. The information is then analysed with IBM® SPSS® Statistics software to determine the respondent profile. The relationship between financial performance and selected variables such as zone, states, period of ar-rahnu services, cooperative function, and number of employees at cooperatives is then examined using a simple SPSS cross tab. The results show that ar-rahnu cooperative, which is in the central zone, has been in operation for a longer time, provides services, and employs 4-6 people, contributes more to financial performance stability. This study’s findings will aid ar-rahnu operators and co-operatives in developing strategies to improve their financial performance in the future. Also crucial is the need to improve certain aspects of the ar-rahnu operation to ensure the financial sustainability of the company.