‘Hajj Funds’! – the Sharia alternative to Hedge Funds?

Posted: February 26, 2014 in Debt, Islamic Finance
Tags: , , , ,

Few nations have a Hajj saving scheme, however the potential to do so is within the reach of all states, especially those with swelling populations. Indonesia, which has the worlds largest Muslim population stands to benefit greatly with the growing wealth and population of its citizens.

This development expands upon the benefits of having Muslims buy into the concept of ‘halal’ based financing, however by the state using these funds as a means to pay for spending, and an alternative to selling to the international bond markets, it seems to have taken an intriguing turn. Ultimately it exposes the humble pilgrim to more potentially toxic government debt (Sukuks in this case), and also further emphasizes how the holy duty of Hajj can be a massive money generator not only for the Saudi’s, but for all governments, Muslim or otherwise

Pilgrim Funds give Indonesian banks a boost

Indonesia taps $5.4bn Hajj fund for financial salvation

As the below quote shows, this means transforming the way method of, and the tolerance to, managing wealth and the feasibility of certain investments. Make the personnel more attuned conventional/capitalist investment practices and use sharia scholars for dollars who will rubber stamp any of these ideas

“I’m trying to teach my staff to follow the yield curve, but it’s not easy because they are religious affairs experts, not financial experts,” said Mr Abimanyu. “The new agency will improve our institutional capacity.”

  1. Rizwan Sayed says:

    Great news for the ummah! As a momin I can feel an elevation in my taqwa. The intention of the government is to support Islamic Banking by shifting the Hajj funds from conventional banks into Islamic halal funds invested in Sukkkuks and other sharia compliant products (and Islamic bankers try and distinguish these from sharia based products – spot the subtle difference). So as a Haaji I ought to feel totally purified at the thought that my funds are funnelled into some SPV located in a tax haven which attracts a return on my capital via some multi tiered corporate structure comprising halal assets.I am sure the Prophet of Allah would have readily stamped his approval. I shall pray with utmost devotion for a decent return on my Saaq certificate when I head towards Arafat…..

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s