The rahn-based Islamic microcredit facility is currently popular among Islamic financial institutions in Malaysia, essentially because of its commercial features, which make it attractive and competitive with conventional pawnbroking. However, the substance of this product triggers some Shari`ah issues, which are mainly centred on the safekeeping fee the bank charges the customer under the principle of ijarah al-hifz (safekeeping fee) and wadi`ah yad al-damanah (guaranteed safe custody). This paper is primarily intended to examine the key Shari`ah issues associated with the structure that is widely accepted at present. It undertakes a case study of two selected Islamic banks that offer a rahn-based Islamic microcredit facility to their clients. The product manual of each bank has been examined to understand the structure flow of the product, payment of the safekeeping fee and other relevant operational aspects of the product. Interviews have also been conducted to gather data related to the operation of this product that was not available in the product manuals of the two selected Islamic banks. It is proposed that the alternative structure must comply with the Shari`ah and meets most of the distinctive commercial features of the rahn-based Islamic microcredit facility to maintain its commercial viability in the industry.

Preference shares have their own characteristics that make them different from ordinary shares. Moreover, they can be divided into various types based on unique features embedded in each type. This paper aims to scrutinise the different types of preference shares to identify related Shariah issues and subsequently propose solutions for the identified issues that would help in structuring Islamic preference shares. This paper employs a qualitative method by analysing relevant documents and literature to understand the subject-matter and Shariah-related issues. This paper finds that several features of conventional preference shares make the instrument as Shariah non-compliant. These are; (i) capital guarantee; (ii) loss sharing disproportionate to capital contribution; (iii) fixed profit; (iv) profit guarantee; and (v) waiving of right prior to realisation of profit. It is noted that there are a few articles discussed on preference shares. Nevertheless, this paper is significantly different from the others in term of in-depth analysis for each type of preference shares and the proposed Shariah-compliant solutions.

The purpose of this paper is to analyze the different features of preference shares from accounting and Shari'ah perspectives. It also aims to study Shari'ah issues arising from preference shares and to subsequently propose solutions for identified issues that will help in structuring Islamic preference shares. The paper uses a qualitative method by analyzing relevant documents and literature to understand the subject matter and Shariah-related issues. The paper finds that several features of conventional preference shares, such as capital guarantee, loss sharing disproportionate to capital contribution, fixed profit, profit guarantee and waiver of rights before realization of profit, make them a Shari'ah non-compliant instrument.