Origins, Evolution and the Future
Studies in Islamic Finance, Accounting and Governance series
Chapter 12: The Lembaga Urusan Dan Tabung Haji: Financing the Modern Pilgrimage
The Tabung Haji is one of the most successful institutions for financing and organizing the modern pilgrimage. This was confirmed in 1990, when it was awarded the Islamic Development Bank prize in Islamic banking for the services it has provided to Malaysian pilgrims. In this chapter we will explain not only its establishment but also the reasons behind its success. This information will be provided in the hope that other Islamic countries may also wish to establish similar institutions. The establishment of Tabung Haji In December 1959, merely two years after the achievement of independence of the Federation of Malaysia, Ungku Abdul Aziz bin Ungku Abdul Hamid, a member of the royal family of the State of Johor and an economist at the University of Malaya, submitted a memorandum to the Ministry of Rural Development.1 The Ministry referred the memo to the then Economic Advisor, Dato’ O. A. Spencer, who advised that the plan outlined in the memo was sound. The memo was then referred to the Cabinet and a committee was appointed to examine it in detail.2 The memorandum was also presented to Sheikh Mahmoud Al-Shahltut, Rector of Al-Azhar University of Cairo, during his visit to Malaysia in 1962. After his approval was obtained, the Pilgrims’ Saving Corporation was incorporated and launched on 30 September 1963.3 The memorandum The memorandum, called ‘Pilgrims Economy Improvement Plan’ and presented in appendix I at the end of the Command Paper, starts with two verses from the Qur’an, verse 2: 196 and 5:...
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