Ar-Rahnu X’Change Records RM1.9 Billion, Underscoring Microcredit Potential

31 August 2025

KOTA KINABALU: The Ar-Rahnu X’Change franchise financing scheme recorded a total of RM1.9 billion in 2024.

Minister of Entrepreneur Development and Cooperatives (MEDC), Datuk Ewon Benedick, said this reflected the strong potential of the Islamic pawn-broking product within Malaysia’s microcredit market.

“I view the Ar-Rahnu X’Change franchise model as one of Bank Rakyat’s most successful programmes in fulfilling its mandate to develop cooperatives in the country, by sharing its knowledge and expertise in Ar-Rahnu business operations since 1993.

“I am confident that the Ar-Rahnu X’Change franchise business has the potential to become the microcredit brand of choice in Malaysia.

“The RM1.9 billion in financing recorded in 2024 demonstrates consistent demand for this Islamic pawn-broking product, and represents a business opportunity that cooperatives should consider taking up,” he said.

He was speaking at the 2024 Ar-Rahnu X’Change Awards ceremony, held yesterday at Le Meridien, here.

Ewon noted that four cooperatives in Sabah currently manage five Ar-Rahnu X’Change franchise outlets in Kota Kinabalu and Sandakan.

“Beginning with the success of the Sabah Government Employees Cooperative Berhad (KOPEKS), the first cooperative in the state to join the Ar-Rahnu X’Change franchise in 2010, three others – the Yayasan Sabah Workers’ Cooperative Berhad, the Progressive Community Development Cooperative, and the Sungei Kelayak Land Development Cooperative Berhad – have since expanded Bank Rakyat’s guided microcredit services in Sabah,” he said.

He added that KOPEKS is in the process of expanding its business by opening a third Ar-Rahnu X’Change outlet in Tawau.

The Minister stressed that the Ministry of Entrepreneur Development and Cooperatives (KUSKOP), together with the Malaysian Cooperative Commission (SKM), would continue to support Ar-Rahnu ventures within cooperatives.

“I have also assured that we will continue to introduce initiatives to strengthen cooperative Ar-Rahnu activities so they remain competitive with similar services offered by private companies,” he said.

Ewon emphasised that the success of cooperatives benefits not only their leaders but also more than 7.2 million cooperative members nationwide.

“In addition to Ar-Rahnu X’Change, I also hope Bank Rakyat will continue to develop other suitable programmes to share its experience and expertise in growing cooperative businesses in the country,” he added.

He urged all cooperators in Malaysia to remain committed and proactive in strengthening cooperative institutions in line with the Malaysia Cooperative Policy (DaKoM) 2030.

Ar-Rahnu X’Change is currently supported by 42 cooperatives nationwide, including four in Sabah.

Also present were Rakyat Management Services Sdn. Bhd Chairman Haji Mohd Jafri Kudus; Bank Rakyat Chief Executive Officer Ahmad Shahril Mohd Shariff; Rakyat Management Services Sdn. Bhd Chief Executive Officer Haji Mohamad Azwani Asa’d; RMS Board members; and Ar-Rahnu X’Change franchise management.