Tabung Haji Prospects
Th: Future Directions
It may be noted here that it took more than 37 years for Th to be in the position of what it is today. Now, besides performing functions that of a financial intermediary, comprehensive Hajj services deserve serious consideration of all authorities concerned involved in the management the Hajj affairs in other Muslim countries.
The success of Th is not the effort of one person, but it is the combination of various factors and efforts from various sectors. At the conceptual level, the key thrust of success of Th lies in translating political and Muslim community will into an action program. Operationally speaking, the tremendous support given by the government of Malaysia, active participation of the Muslims as depositors of Th and their confidence in an efficient and trustworthy management are essential ingredients of success of Th.
In spite of what Th has achieved, there is the realization that the future holds greater challenge. Th has therefore, consolidated general plans for its future. These general plans are derived from Th strengths mentioned above. Th plans are:
- To put in more efforts for mobilizing Muslim funds for a more diversified investment in all spheres of commerce and industry which adheres to Islamic principles.
- To maintain good relationship with the government by continually updating the government of any current policy issues related to Islamic Financial System and giving support to government policies.
- To maintain the good relationship with agencies that are involved in Hajj operation through efforts like information sharing and work visits.
- To constantly garner support from Saudi Arabia through more government to government meetings and sharing of information.
- To keep good rapport with those involved in the mass media by participating actively in events co-organized or organized by the mass media. Th will continue ensuring that the news highlighted is accurate and truly reflective of Th conditions.
- To heighten awareness on the importance of corporate governance. The corporate governance awareness programs are not just for the management of Th proper but also for its subsidiaries. This is in line with government’s move to enhance corporate governance in the private sectors.
- To constantly identify new relevant technology to upgrade and enhance the quality of its services. There are also plans to export Tabung Haji’s technology overseas.
- At an operational level, efforts are being made to add more commercial values to each Th branch so that each of them is more efficient in collecting deposits, more effective in delivering Hajj related services and more independent financially.
- To give more emphasis in sustaining its profitability so as to be able to continually deliver competitive bonus rate and be able to meet the operational costs of Hajj services on a sustainable basis.
Lessons and Prospects
From the preceding analysis of factors responsible for the success of Tabung Haji, it is evident that “political will” and “collective community will,” become the dominant factor for its successful functioning. The presence or absence of these key factors in varying degrees would explain the possibility of replication of Th in Muslim countries and their different stages of development. It is to be understood that each of Muslim countries have patterns of colonial past and socio-economic history, apart from differences in natural and physical resource endowments.
The momentum of Islamic social and economic ethics and their creative values of new ideas, technology and institutions which can alter the status quo received a serious setback due to the successive stages of several centuries of colonization and cultural domination of vital areas of the Muslim world. Despite the fact that Muslims themselves must share their part of responsibilities for the Islamic momentum, the process of colonization has indeed contributed to a great extent to bring about the de-Islamization of the Muslim mind. What is needed is the self-evaluation of each of the Muslim societies only to develop the corrective measures for action programs. The management of Hajj funds is a part of the package. Given required political will, it should be possible to translate the experience of Tabung Haji into an action program in other Muslim countries of the OIC. Th maybe promoted as a center/source of systematic Hajj Fund Management
Comment: ¾ People approach Islamic Banking from different angles. I approach it from a very rare but a key marketing approach. In my view, the product concept of Tabung Haji is marvelous. Because, what they have done is to combine two very strong behavior drivers; satisfaction of religious need and commerce - the enrichment of soul and self. This is faith-based-banking - a term coined for Islamic Banking in US. What Th offers in terms of a conceptual framework, is really a win-win situation - profit here and the hereafter. It is a strong product concept, and that is why it has been extremely successful. How successful! Simply look at some of the figures that have been presented; 22 million is Malaysian population, half of which is Muslim i.e. 11 million. Take 4 people per household, it means 2.8 million households. Out of this, they have 4 million depositors. So, in all likelihood they have hundred per cent of the households, and within a household they have got multiple accounts. I can not think of a more successful marketing concept or project than this.
Now coming to what applies to us. Can Th success be transferred to Pakistan? In my opinion, yes, it can be, looking at the strong response this concept has received. If we want to establish Islamic banking (it does not matter if there are flaws or problems), the best, quick and sure way is to broaden base of Islamic banking ownership.
If Islamic banking is patronized by two institutions catering to 20 institutions and may be two thousand depositors, it is not going to go anywhere. Even if we get 10 or 20 per cent of the household, imagine the numbers we will have. If we can put Islamic banking in people’s lives, it shall take roots and grow. Then people will actually lead in this effort rather than the institutions and experts. If the product is strong - which I believe Islamic banking is - response shall definitely be strong. I beseech those bankers having no issue with conviction, to forget the Islamic side, Th bears a very strong, pure and commercial proposition. The fact is that with this concept, the banks shall have a very stable source of funding that is cheaper besides a large depositor base.
Source: Towards Islamic Banking: Experience and Challenges, Institute of Policy Studies. Republished with permission.