Comparative Analysis Between Sharia Pawnshops and Conventional Pawnshops in The Economic Empowerment of Indonesian Communities

Abstract

Sharia Pawnshops and Conventional Pawnshops are two financial entities that play an important role in strengthening the empowerment of Indonesian society. For years, they have been offering credit services with the aim of improving people's financial situations. However, the two institutions operate using different principles and methodologies. The aim of this scientific work is to analyze and then determine which one is more empowering to the community, between conventional pawnshops and sharia pawnshops. This research is included in qualitative research, with data sources containing all material that can be used as a guideline for research emphasis, namely the comparison between sharia pawnshops and conventional pawnshops in empowering Indonesian society. Sharia pawnshops play a bigger and more effective role in empowering the community, especially by providing financial products based on Islamic sharia principles. Sharia pawnshops prohibit all types of interest and focus on contract terms, honesty and security required in buying and selling transactions based on Islamic law.