Islam encourages Muslims to engage in any lawful and profitable business as a panacea for poverty elimination and legal property acquirement. Financial constraints have caused many people to seek interest based loans from conventional banks or cooperative institutions that contradict Islamic principles. Islamic banking and finance requires a global critical discussion on current issues and practices. Islam encourages Muslims to engage in any lawful and profitable business and transaction in order to enhance and enrich their daily income. However, Islam prohibits all elements of interest (riba) in transactions and business. It is binding on Muslims to desist from all elements of riba within their capacity and ability. It is a fact that it is very difficult to secure interest-free loans including from cooperative systems and practices in many African countries. Al-Rahn known, also as pawn broking, is an alternative for securing financial aid or interest-free loans in the interest of the less privileged Muslims. The study examines awareness of al-rahn among Nigerian Muslims, factors that influence al-rahn, roles of Islamic banking on establishment of al-rahn across Nigeria, and hindrances of proper implementation of al-rahn across the nation. The question is what is the awareness level among the Nigerian Muslims? What are the factors that influence al-rahn schemes and its hindrances? The study adopts a quantitative approach. The study offers suggestions on how to elevate the level of awareness of al-rahn in Nigeria in order to protect the sanctity of Islamic values.
