THE CHALLENGES OF SHARIA PAWNSHOPS IN INDONESIA IN THE ERA OF THE INDUSTRIAL REVOLUTION 4.0

The development of the Islamic financial system in Indonesia is marked by the establishment of various Islamic financial institutions and the issuance of various sharia-based financial instruments. Essentially, Islamic financial institutions are different from conventional financial institutions, in terms of mechanisms, objectives, powers, scope, and responsibilities. The provisions and discourses contained in classical fiqh on Rahn are then adapted to modern economic developments and synergized with the needs of today's society. With the majority of the Muslim population, it is not difficult for Sharia Pawnshops in Indonesia to develop their business. Sharia pawnshops are expected to be able to conduct campaigns to the public about the use of sharia-based products. However, there are still various problems in developing sharia pawnshops in Indonesia. And, an analysis needs to conduct to uncover obstacles and find solutions in an effort to develop sharia pawnshops. The type of the research was normative legal research using a qualitative descriptive approach. The study indicates that Sharia Pawnshops are one of the financial institutions that provide effective alternative funding for the community. The growth of pawnshop profits which continues to grow in the era of the industrial revolution 4.0 and during the Covid-19 pandemic is one indicator of the success of sharia pawnshop management. In addition, sharia pawnshops can prove that they can prioritize Islamic moral values during the rapid development of financial institutions in Indonesia. However, from all of this, there are problems that need to be evaluated to improve the performance of sharia pawnshops in the future.


A. Introduction
The development of the Islamic financial system in Indonesia is marked by the institutions. Public interest in sharia pawn services is also increasing. Pawns based on sharia principles put the customers with not charged on loans but only need to pay administrative fees, storage service fees and the cost of maintaining collateral (ijārah).
With the majority of the Muslim population, it is not difficult for Pegadaian Syariah to develop its business. With many product offerings, both rahn and non-rahn, it attracts the interest of both Muslim and non-Muslim communities. Sharia pawnshops are expected to conduct campaigns to the public about the use of sharia-based products.
This hope is also a challenge for sharia pawnshops to continue to always innovate the products that meet the needs of the community.
Efforts to develop sharia pawnshops are not as easy as imagined. There are many technical obstacles in the field in efforts to develop sharia pawnshops. An analysis need to conduct to find out the obstacles and find solutions in an effort to develop sharia pawnshops. Previous studies have been carried out, such as Rokhmat Subagiyo 3 , Surepno 4 , Naida Nur Alfisyahri 5 , and MS Shabbir 6 . However, research that specifically examines sharia pawnshops in the era of the industrial revolution 4.0 has not been carried out. For this reason, this article tries to analyze the obstacles, challenges, opportunities and threats for the development of sharia pawnshops in Indonesia, in the era of the industrial revolution 4.0.

B. Method
The type of the research was normative legal research 7 with qualitative descriptive approach. It is a research method that describe existing phenomena, which are currently or in the past. This research does not manipulate or change the independent variables, but describes a condition as natural and the description of conditions might be presented in individual or using numbers.

History of Sharia Pawnshops in Indonesia
The history of sharia pawnshops in Indonesia is divided into two parts of historical periodization. First, the forerunner of pawning institutions brought by the Netherlands and pawnshops which adopted pawnshops from Italy. Then, the history of pawnshop institutions is divided into two, history in general and in particular. a.

History of Pawnshops in General
According to historical records, pawnshops have been known in Indonesia since 1746, which was marked by the Governor General of the VOC, Van Imhoff establishing Bank Van Leening on August 28, 1746, with an initial capital of 7,500,000, consisting of 2/3 of the capital belonging to the VOC and the rest belonging to the private sector.
However, it is believed by the Indonesian people that a long time before that, the Indonesian people were familiar with pawn transactions, by carrying out the practice of debt and receivables with movable goods as collateral. Therefore, Perum Pegadaian is the first alternative facility and has been around for a long time and has been widely known by the people of Indonesia. 8 When the VOC went bankrupt and ended with the dissolution of the trade organization in Indonesia in 1800, the pawnshop business was taken over by the Dutch East Indies Government. During Daendels reign, regulations were issued regarding goods that could be accepted as collateral for pledges, such as cloth and others.
There is a fundamental difference between the conventional pawnshop system and the sharia pawnshop system. In conventional pawnshops, the position of the company is a passive party, not involved with the customer's business activities. It is different with the sharia pawn system. For certain products, it requires the company to be involved in reviewing the productive business occupied by the customer. In this case, the sharia pawnshop has a pawn mission, as follows. 9 1) Social mission, in practice, is to help citizens to gain access to the financial sector.
2) The business mission, is the basic embodiment of being a financial institution.
Studying the history of pawnshops, it found the Government Regulation no. 10 of 1990 on Perum Pegadaian, changing the status of pawnshops from a Service Company to a Public Company (PERUM). This means that the pawnshop is designated as a Sole Business Entity within the Ministry of Finance of the Republic of Indonesia, which is authorized to distribute loan money on the basis of the pawn law with the following objectives: 10 1) Supporting government programs in the economic field on the basis of pawn law.
In an effort to improve the efficiency and effectiveness of lending, especially to the lower middle class, micro, small and medium enterprises, the Pegadaian Public

History of Sharia Pawnshops in Particular
The forerunner of the pawning institution came from Italy which later expanded throughout the European Plain. In Indonesia, the issuance of PP No. 10 dated April 1, 1990 might be an early milestone in the rise of pawnshops. The PP emphasizes the mission that must be carried out by pawnshops to prevent the practice of usury. This mission did not change until the issuance of PP/103/2000 which has been used as the basis for the pawnshop's business activities until today.
Many parties believe that the operation of pawnshops before the MUI fatwa dated  1) The murtahin (the recipient of the goods) has the right to hold the marhun (the goods) until all the debts of the rahin (the one who delivered the goods) are repaid.

2)
Marhun and its benefits remain the property of rahin. In principle, marhun should not be used by murtahin except with the permission of the rahin, without reducing the value of marhun and using it only to replace the cost of maintenance and care. 3) The maintenance and storage of marhun is basically the responsibility of the rahin, but it can also be done by the murtahin, while the cost and maintenance of the storage remains the responsibility of the rahin.

4)
Marhun Sales a) When it is due, the murtahin must warn the rahin to immediately pay off the debt.

b)
If rahin is still unable to pay off the debt, then marhun is forcibly sold/executed through an auction according to sharia.
c) The proceeds from the sale of marhun are used to pay off debts, unpaid maintenance and storage costs and selling costs. b. The cost of storing goods (marhun) is charged by the pawnbroker (rahin).
c. The costs as referred to paragraph 2, are based on expenses that are actually needed. d.
The cost of storing goods (marhun) is carried out based on the ijārah contract.
In this Fatwa, the gold pawn combines three forms of transactions. The forms are qarḍ, rahn, and ijārah transactions. Short-term loans provides customers to use a qard contract, which is a loan without using interest, where gold is used as collateral for the loan using a rahn contract. Meanwhile, the fees and costs for storing goods (gold) charged to customers based on the ijārah contract. 21

The National Sharia Council Fatwa Number 68/DSN-MUI/III/2008 on Rahn
Tasjily has considered a form of Sharia Financial Institution (LKS) service that is needed by the community. It is loans or other transactions that cause debts and receivables by providing guarantees. The goods are controlled and used by the debtor.
In addition, the creditor has the right to easily execute the collateral which is controlled by the debtor in the event of a default. And, the MUI National Sharia Council needs to stipulate a fatwa on Rahn Tasjily to serve as a guideline.
The fatwa explained that rahn tasjily is a guarantee in the form of money but the collateral (marhun) must remain in the control of the utilization of rahin and the proof of ownership is submitted to the murtahin. Rahn tasjily or what can be called a sharia fiduciary guarantee is allowed. The costs must be paid by rahin, in principle the same as

Sharia Pawnshop Products in Indonesia
To meet the needs of the community, sharia pawnshops do not only issue pawn products, but also non-pawn products.

3) Pawn Gold in Sharia Installments/Arrum Gold
Gadai Emas Installment Syariah is a pawnshop product to provide cash loans with jewelry (gold and diamonds) as collateral. Loans can be paid in installments through an easy and sharia-compliant process. The advantages of this product are loans starting from Rp. 1 million -Rp. 500 million, credit limit 95% of the estimate, term of 12, 18, 24, and 36 months, Admin fee Rp. 70,000 and mu'nah costs 0.95% per month of the estimated value.

4) Rahn Hasan
Rahn Hasan is a rahn with a mu'nah maintenance rate of 0% of the estimate, with a period of 60 days. Maximum marhun bih Rp. 500,000.

5) Rahn Flex
Rahn Flex is the provision of loans with guaranteed movable goods according to sharia, high loan ceilings and daily deposit fees. The advantages are discount on deposit fees for loans below the highest ceiling, free administration fee, loan money is received in full without deductions, can be extended, in installments or add loans, credit limit of 96%, 94%, or 93%, term of 10 days, 30 days, 60 days, minimum 5 days, and Great discount for loans below the highest ceiling.

6) Rahn Bisnis
Rahn Bisnis is a pawnshop product to provide cash loans to business owners with gold collateral (bars or jewelry). The advantages of this product are loans starting from Rp. 100,000,000 to more than Rp. 1 billion (BMPK), mu'nah ranging from 0.38-0.55% per 10 days, credit limit 87%  The advantages of this product are easy process with professional service, Safe investment alternative to maintain asset portfolio, As an asset, gold bullion is highly liquid to meet urgent funding needs, There is a choice of gold bars with a weight ranging from 5 grams to 1 kilogram, Gold bars can be bought by way of cash purchases, installments, collective (groups), or social gathering, Down payment ranging from 10% to 90% of the value of the precious metal, and the installment period starts from 3 months to 36 months. The requirements are for cash purchases, customers simply come to the Pegadaian Outlet (Gallery 24) by paying the value of the Precious Metal to be purchased and for purchases in installments, customers can determine the pattern of installment payments according to their wishes.

2) Gold Savings
Gold Savings Pegadaian is a gold balance deposit service that makes it easier for people to invest in gold. The Pegadaian Gold Savings product allows customers to invest in gold easily, cheaply, safely and reliably. Competitive costs, payment can be made for more than one bill, the procedure is easy and in one service counter, can be done through the Digital Pegadaian application, each customer can make payments for more than one bill, and the customer does not have to have an account at the bank. The requirement is that the customers simply come to Pegadaian outlets to bring and submit customer numbers for electricity bills, telephone, cellphone credit, PDAM, train tickets, and so on.

The Problems of Sharia Pawnshops in Indonesia
In a study conducted using SWOT analysis, internal and external factors were found that influence the development of sharia pawnshops in Indonesia, presented in  The assumption that sharia pawnshops are related to religious fanaticism The difficulty of eliminating the mechanism of interest that has taken root in the community Based on table 1, the evaluation for sharia pawnshops in developing their business are: first, maximizing service to provide convenience to customers. Second, improve facilities and infrastructure as well as ease of transactions. Third, build cooperative relationships with other financial institutions. Fourth, increase the number of service offices so that they are easily accessible to the public. Fifth, cooperating with lower middle class community groups to carry out disseminate information,Provide skilled human resources for marketing to attract customers.

D. Conclusion
Sharia Pawnshops is one of the financial institutions that provide effective alternative funding for the community. The growth of pawnshop profits which continues to grow in the era of the industrial revolution 4.0 and during the Covid-19 pandemic is one indicator of the success of sharia pawnshop management. In addition, sharia pawnshops can prove that they can promote Islamic moral values in the midst of the rapid development of financial institutions in Indonesia. However, from all of these things, problems will continue to be evaluated to improve the performance of the sharia pawnshop in the future. Steps taken include maximizing services to provide comfort to customers, improving facilities and infrastructure as well as ease of transaction, build a cooperative relationships with other financial institutions, increase the number of service offices so that it can be easily accessed by the public, cooperate with lowermiddle-class community groups to carry out information and provide skilled human resources for marketing to attract customers