Business Letters

Savings scheme, systemic subsistance sustained

Written by TheMole

Jan 28 2018

Tabung Haji (TH), a savings scheme mooted in the early 60s as the enabler of common Malaysian Muslims to systematically save up for the Hajj pilgrimage had came a long way for the benefit of hundreds of thousands despite the rising cost to perform the fifth pillar of Islam.

Savings of aspiring pilgrims and depositors are placed under the Wadiah scheme. The accumulated funds were then invested in shariah compliant financial products, commercial papers and in businesses such as property developments and plantations.

The division of investments were in fixed income deposits (29 per cent), portfolio equity (41 per cent), money markets and financial instruments (20 per cent) and properties (10 per cent).

The investments are rigorously scrutinised by an independent panel.

Net proceeds after operations are returned to depositors as Hibah, which literal translation is ‘gift’. Part of it is used to finance pilgrims for their Hajj journey, as the charge for the Hajj pilgrimage is unable to cover the actual cost.

Since 2009, Hajj pilgrims under TH are charged RM9,980.00 for airfare, accommodation, ground handling services and three square meals a day. The actual direct cost is far more than that.

Over the past 10 years, TH had footed RM1,182 million on top of the amount charged to each pilgrim. This is a decision taken by TH with the government’s approval to ensure that to perform the Hajj remains affordable.

This year, the actual cost for each pilgrim is estimated at RM22,450 but the charge on them will be maintained at RM9,980.

The subsidy provided by TH for the pilgrims had actually been increased by 26.14 per cent over the past 10 years and it was  expected to be increased further up to 124.94 per cent for the coming Hajj season.

That is a rise from 20.73 per cent of actual cost in 2008 to a forecasted 55.54 per cent this year. In other words, for this year’s Hajj season, pilgrims will be charged less than 45 per cent of the actual cost of their pilgrimage.

Demand and supply is the key to the rising actual cost, especially in Mekkah and Madinah. 

TH continuously works towards providing better services and comfort for the pilgrims. For example, the accommodation in Mekkah is within 1,000 metres from Majlidil Haram and in Madinah, it is within 100 metres of Haram Al Shariff.

Pilgrims are also provided with full hospital facilities and a medical team is available at all time for them. A mobile hospital is employed for the Wuquf in Arafah and would move as the bulk of Malaysian pilgrims move upon completion of each stage of the pilgrimage.

TH also employs religious teachers to coach pilgrims throughout their pilgrimage. Volunteers were also made available to assist the much older and less able pilgrims.

The total cost for this year’s Hajj season to be handled by TH is expected to be in excess of RM720 million.

The success of handling over 30,000 Hajj pilgrims each season with such efficiency and providing them with a high level of comfort in the holy land made TH the envy of other countries’ organizing body for Hajj pilgrimage.

About 80 per cent of  the 269,301 Malaysians, who performed their Hajj pilgrimage between 2008 and 2017 did so under the TH’s Muassasah scheme.

The concept of sharing is the principle of TH’s financing of the extra cost to perform Hajj. Therefore, despite the rising cost over the years, the charge required on the pilgrims had been maintained at an affordable rate for the majority of Malaysian Muslims.

Note : Please also read The Things Tabung Haji Does For Pilgrims.



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