The construction of an Islamic capitalism through Pagang Gadai amongst the Minangkabau people

Abstract

The Minangkabau ethnic group has a pawn system called Pagang Gadai (PG) that is oriented towards high social values. This pawn system aims to help people in need; the affluent can help those who need assistance. However, as time went by this social motive has shifted into a profit-oriented business motive hiding behind this pawning activity. Even more, this shift can be seen from the large number of tribal assets that have been pawned although they are not allowed to be used as collaterals. In light of this phenomenon, this study aimed to understand the form of this pawn system shift in Minangkabau that had made the pawning of tribal assets a common practice. The data collection was conducted using in-depth interview method. Fifteen pawnbrokers were interviewed; they were selected through the purposive sampling technique and were limited using the snowball sampling technique. Subsequently, the data were analyzed using a qualitative approach. The results of this study show three important findings in the shift in the pawning motive in Minangkabau. Firstly, the shift in the pawn system has resulted in a capitalistic lifestyle. Secondly, this shift has weakened the position of the pawnbrokers because of their financial fragility. Thirdly, these pawnbrokers ultimately cannot enjoy the benefits of the pawned assets in whole or in part. This study concludes that this occurring shift has been the result of the decline in Minangkabau traditional values, a pragmatic lifestyle, and weakening compliance with applicable laws.

Keywords

• construction of capitalism
• Pagang Gadai
• Islamic economics
• Minangkabau society