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The Tabung Haji Experience: An Appraisal. By: AHMAD MUJTABA KHAN FAWAD AHMED KTK. Introduction. TH has been in operation since 1963, is viewed as one of the most successful experiments in the management of Hajj affairs in Islamic Ummah

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The tabung haji experience an appraisal

The Tabung Haji Experience:An Appraisal





  • TH has been in operation since 1963, is viewed as one of the most successful experiments in the management of Hajj affairs in Islamic Ummah

  • Today Tabung Haji’s total funds under management are a staggering 23 billion Malaysian ringgit making it the largest non-banking Islamic savings institution in the world

  • Despite the success, this model has not yet been replicated in other muslim countries.


  • a) A TabungHaji-like national or regional institution would be a mutual savings institution it is the members (the savers) who benefit. The Board of Trustees and the senior management are appointed by the government.

  • b) This strategy is consistent with social and financial inclusion policies, which are aimed at empowering the poor and the minorities.

  • c) An institution like TabungHaji anywhere would be an excellent way of mobilizing local savings on a Shariah-compliant basis.

  • d) TabungHaji is not only a savings and investment fund, but also an educational institution thus preparing a would-be Haji on the culture, climate, health provisions, attire and on the religious rituals of Haj.

  • e) A TabungHaji-like model preempts fraud, abuse and exploitation .

  • f) This type of model and strategy is also a major confidence-builder and could encourage Muslims to access the wider Islamic finance industry.

  • g) A TabungHaji-like approach would give security, comfort and recourse in law as members to ordinary Hajis who may have complaints or disputes. In this way the organization would empower Hajis rather than marginalize them to the mercy of the unscrupulous travel operators and Haj organizations.

1 political will with a social vision
1.Political will with a social vision

  • TH is an example how a "political will" with a social vision can be translated into an action program backed by an appropriate technical knowledge.

  • the traditional methods of savings are not only detrimental to the rural economy but also not beneficial for the future pilgrims.

  • recommend that future pilgrims can save in a financial institution without 'riba'.

  • profits derived could be given to the depositors, helping them to perform Hajj earlier than planned.


  • besides, enable Muslim to invest and participate in development process of the country

  • the recommendation captured the imagination of PM, Tunku Abdul Rahman

  • he saw the tremendous possibility of development of Hajj management as an institution and through an act of parliament.

  • this is how a "political will" was translated into an action program backed by a sound technical study.

2 monopoly business and government guarantee
2-Monopoly Business and Government Guarantee

  • Tabung Haji is an exclusive right to deal with the management of Hajj affairs in Malaysia.

  • thereby ensuring the steady flow of pilgrims' deposits each year

  • the monopoly status is actually derived from the provision within the Tabung Haji Act, which precludes any other individual or entities to provide Hajj services in Malaysia without the consent from the minister-in-charge of Tabung Haji.


  • Malaysia Government provides guarantee to each depositor, thus adding their confidence in the organization

  • Besides, Tabung Haji encourages saving not only for the purpose of pilgrimage but also for other need of depositors.

  • Thus, it has been successful in attracting the saving of potential Muslim depositors

3 flexibility of deposit
3.Flexibility of Deposit

  • Simplification of procedures of deposit as well as cooperation with other similar institution has enabled Tabung Haji to mobilize tremendous savings for investment purposes.

  • One can save through anyone of the following means:

  • Any Tabung Haji office throughout Malaysia

  • Any post office throughout Malaysia

  • Monthly deduction by their employers

  • Mailing the deposit direct to TH head office

  • Saving scheme for dependent.

The tabung haji experience an appraisal


Shareholder will finance a project and the dividends or profits are divided accordingly as

agreed by the parties.

Al Bai Bithaman Ajil

Financing with deferred repayment over a specific period of time (deferred sale). Housing

and Motor Vehicle Loan.


An agreement to provide the capital by one party and management expertise by the other party.

The tabung haji experience an appraisal

Al-Qardul Hassan

In case of Benevolent Loan, the provider of capital is guaranteed at least their principal amount.

Al wadiah


In order to utilize the fund of depositors, tabunghaji uses the wadiah.

It requires new depositors to fill in the Depositors Personal and Nomination Form which includes the statement of aqadizin.

The principle of aqadizin under the law of the tabunghaji Act means that depositors agree to save in TabungHaji and give consent for it to manage their saving for investment purposes.

The profit derived from these investment is distributed among the depositors in the form of a bonus.

TH provides credit facilities to its staff for the purpose of buying a house/vehicle based on the principle of “baibithamanajil

Zakat payment
Zakat Payment

  • Before distribution of dividends, TH will pay business zakah from the profits earned during the zakah year and the amount of working capital at the end of the zakah financial year (hijrah)

  • The rate is 2.5 percent on the aggregate of profits earned.

  • The pay on behalf of depositors based on aqad izin where depositors are considered to be providers of funds for the business and investment activities.

Types of investment has been made by tabung haji
Types of investment has been made by TabungHaji

  • Investment in shares mainly in quoted shares of the stock exchange (equity participation).

  • Investment in subsidiary companies ( plantations, transport trading, housing and property management)

  • Investment in Land and Building (investment in property market in the constructions of building for office and rental purposes etc).

  • short term investment in Bank Islam.

  • TH Travel & Services Sdn. Bhd. (hajj, umrah, and tour services sector)


  • TH emphasizes that investment activities are not involved in anything which is contrary to Islam.

  • Does not invest in sectors such as banking, insurance and Hotel.

  • Will not invest in companies that are involved with activities which are prohibited by Islam

The tabung haji experience an appraisal