Why is collateral (rahn) necessary in Islam?

Pledging is when money is designated as collateral for a debt, to be collected from it if collection from the debtor becomes impossible. It is permissible according to the Qur'an, Sunnah, and scholarly consensus, as stated in His Almighty's saying: (And if you are on a journey and cannot find a scribe, then let there be pledges taken into possession) [Al-Baqarah: 283]. Also, the Prophet (peace be upon him) bought food and pledged his shield. Pledging is not obligatory, and jurists have agreed upon its permissibility. The wisdom behind legislating pledging lies in securing the debt for the creditor, which encourages him to lend to his Muslim brother. If the debtor is unable to pay, the pledge is sold, the debt is settled, and any remaining amount is returned to the debtor. Pledging serves the interests of both the creditor and the debtor: the creditor secures his right, and the debtor finds someone willing to lend to him.