The Contemporary Role of Tabung Haji Malaysia in Fulfilling Sustainability via Islamic Social Finance

Abstract

As an Islamic institution, Tabung Haji (TH) Malaysia is important in mobilising savings of depositors and operating innovative Islamic investment fund in an efficient manner thereby fulfilling the lifelong desire of Muslims in embarking their pilgrimage journey and performing hajj rituals. The positive impact of TH on Muslim society in Malaysia is undeniable. However, problems have been brewing in TH when in 2015 the Central Bank of Malaysia issued a warning
to TH on their negative reserves but still paid out higher dividends and in 2018 the new management of TH made police reports on the 2017 financial accounts alleging that the previous management misused fund, broken their own accounting rules, and illegally declared dividends. This paper undertakes to examine the history, objectives and sustainable strategies of TH that ensures its long term survival, resilience and contribution to Islamic Social Finance (ISF). This study uses qualitative library research method that specifically refers to financial reports (2010-2018), documents, journals and texts regarding activities of TH and authors’ own observation, to test how TH adapts to the new setup of Covid-19 (C19) challenges via ISF. This study reveals that although TH provides a good example as a competent hajj agency worldwide unethical political and external interference on professional management and decision-making of TH has brought undue pressures on TH to make politically-motivated decisions resulting in a conflict of interests. This study suggests that in times of C19 new landscape, TH should lead in ISF, reinvent TH as an effective post pandemic organisation and adopting purposeful technologies for business survival. This study has important implications on business goals and relevance of TH if they are to enhance their image and contributes to sustainable development of ISF.