---
title: "What is Rahn? | IslamicOpenFinance™"
description: "A pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults."
url: https://islamicopenfinance.com/glossary/rahn/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Lease, agency and service contracts](https://islamicopenfinance.com/glossary/#lease)

Lease, agency and service contracts

# Rahn

A pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults.

Rahn is a contract in which a pledgor pledges an asset as collateral to a pledgee to secure a liability or obligation. Bank Negara Malaysia's glossary names the pledgor as the rahin, the collateral as the marhun and the secured obligation as the marhun bih. If the debtor defaults, the collateral can be sold and the proceeds used to settle the debt, with any surplus returned to the owner.

## Sources

- [Bank Negara Malaysia, Shariah Contract Framework discussion paper, 2024: Glossary, Rahn](https://www.bnm.gov.my/documents/20124/938039/dp-shariah-contract-nov24.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Kafalah** A guarantee: a guarantor joins the guaranteed party in assuming a specified liability.](https://islamicopenfinance.com/glossary/kafalah/) [**Hawalah** Transfer of a debt: the obligation to pay moves from the original debtor to another party who accepts it.](https://islamicopenfinance.com/glossary/hawalah/) [**Collateralised murabahah** A murabaha placement secured by collateral such as sukuk, used as an Islamic alternative to a repo.](https://islamicopenfinance.com/glossary/collateralised-murabahah/)

**Lease, agency and service contracts**

1. [Ijarah](https://islamicopenfinance.com/glossary/ijarah/)
2. [Ijarah muntahia bittamleek](https://islamicopenfinance.com/glossary/ijarah-muntahia-bittamleek/)
3. [Wakalah](https://islamicopenfinance.com/glossary/wakalah/)
4. [Kafalah](https://islamicopenfinance.com/glossary/kafalah/)
5. [Hawalah](https://islamicopenfinance.com/glossary/hawalah/)
6. [Ju'alah](https://islamicopenfinance.com/glossary/jualah/)
7. [Ijarah mawsufah fi al-dhimmah (forward lease)](https://islamicopenfinance.com/glossary/ijarah-mawsufah-fi-dhimmah/)
8. [Ijarah of services](https://islamicopenfinance.com/glossary/ijarah-of-services/)

[All 221 terms](https://islamicopenfinance.com/glossary/)