Global Jou nal o Economic and
Finance Resea ch
Vol. 02(10): 988-1000, Oc obe 2025
Home Page: h ps://gje .com/
e-ISSN: 3050-5348
p-ISSN: 3050-533X
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 988
Sha iah-Complian Financial Se ices o Hajj and Um ah: P oduc s,
Challenges, and Policy Recommenda ions
Zahiduzzaman Zahid1, Md. Shahed Alamm2, Md. Abu Yousu 3, Munshi Md Ash aqul Alam4, Md. Aminul Islam5,
Md. Mohi Uddin6, Muhammad Masud Pa es7, Salman A i 8
1(CSAA, CIPA, CISA, CSCA, PMP), Islamic FinTech & Business Analy ics Resea che , Uni e si y o he Cumbe lands,
Ken ucky, USA. h ps://o cid.o g/0009-0009-0075-0905
2(CSAA), Islamic Banking and Finance P o essional, Senio Manage , Islamic Financing Di ision, Bangladesh Finance PLC,
Bangladesh. h ps://o cid.o g/0009-0004-5203-0866
3(CSAA), PhD Resea che , IIUM Ins i u e o Islamic Banking and Finance, In e na ional Islamic Uni e si y Malaysia, Kuala
Lumpu , Malaysia, and Assis an Vice P esiden , Islamic Financing, DBH Finance PLC. h ps://o cid.o g/0009-0004-5006-216X
4(CSAA), Head o Islamic Financing Wing, Bangladesh Finance Limi ed, Bangladesh.
5O ice , Islami Bank Bangladesh PLC, Bangladesh.
6(CSAA), Pos -G adua e Resea che , Depa men o A abic, Uni e si y o Dhaka, Bangladesh.
7(CSAA, CISA), Senio P incipal O ice , Islamic Banking Di ision, Sonali Bank PLC, Dhaka, Bangladesh.
8Fo me Resea ch schola Yale di ini y school, USA & Fo me isi ing Assis an p o esso , Uni e si y o Punjab, Pakis an.
INTRODUCTION
P oblem S a emen
Hajj and Um ah a e wo mos holy du ies o eligion, which b ing a g ea deal o spi i ual bene i s. Ye , as signi ican as hese i es
a e, he cos o unde aking hese pilg images has soa ed in ecen yea s, making i excep ionally p icey o many Muslims o
pe o m hem – especially hose o modes means. The in e na ional inance end o Hajj/Um ah con inues o be e en mo e
challenging pos -COVID, gi en inc eased cos and in la iona y p essu es in addi ion o compliance a ound global a el. Bu o
KEYWORDS: Sha iah-complian inance,
Hajj inancing, Um ah accessibili y,
Mu abaha, Muda abah, Taka ul, Islamic
insu ance, pilg image cos s, inancial li e acy
Co esponding Au ho :
Zahiduzzaman Zahid
Publica ion Da e: 03 Oc obe -2025
DOI: 10.55677/GJEFR/02-2025-Vol02E10
License:
This is an open access a icle unde he CC
BY 4.0 license:
h ps://c ea i ecommons.o g/licenses/by/4.0/
ABSTRACT
Hajj and Um ah ep esen p o ound eligious obliga ions o Muslims
wo ldwide, ye escala ing cos s due o in la ion, a el expenses, and pos -
COVID egula ions ha e ende ed hem inancially inaccessible o many,
pa icula ly low-income indi iduals in egions like Sou heas Asia, he Middle
Eas , and No h A ica. This s udy explo es Sha iah-complian inancial
se ices—such as Mu abaha (cos -plus inancing), Muda abah (p o i -sha ing),
Taka ul (Islamic insu ance), and sa ings plans—as iable solu ions o enhance
a o dabili y and inclusi i y. Employing a mixed-me hods app oach, including
eg ession analysis, hypo he ical simula ions, su eys o 500 pilg ims, and
in e iews wi h 20 expe s om Islamic inancial ins i u ions, he esea ch
e alua es p oduc e ec i eness, accessibili y, and challenges. Findings e eal
Mu abaha as he mos adop ed and e ec i e model, educing inancial bu den
by up o 3.8% h ough s uc u ed epaymen s, while Taka ul p o ides essen ial
isk p o ec ion bu minimal cos sa ings (0.6%), and Muda abah emains
unde u ilized due o complexi y. Key ba ie s include low inancial li e acy,
egula o y gaps, and aud, mi iga ed by echnological inno a ions like he
Nusuk app and blockchain. Policy ecommenda ions emphasize s eng hening
egula o y amewo ks, p omo ing inancial educa ion, subsidizing low-income
pilg ims, and le e aging digi al pla o ms o os e equi able access. Ul ima ely,
his pape ad oca es o a sus ainable, e hical Islamic inance ecosys em o
enable all Muslims o ul ill hei pilg image du ies.
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 989
oo many people, his is an una ainable d eam - no because hey don' ha e he spi i o ake up he pilg image, bu simply due o
inancial cons ain s – and he e’s some hing w ong abou ha . I ’s ime we ind a sus ainable manne o inancing pilg images
based on Islamic eachings.
Al hough Islamic inance p o ides a a ie y o Sha iah-complian inancial ins umen s, including Mu abaha (cos -plus inancing),
Muda abah (p o i -sha ing), and Taka ul (Islamic insu ance), he pene a ion and accessibili y o hese ins umen s a e s ill low,
pa icula ly in lowe -income en i onmen s. This is pa icula ly he case wi h some egions, including Sou h Eas Asia, A ica, and
some pa s o he Middle Eas , whe e waq esou ces a e lacking and money emains an obs acle o ensu ing ha oppo uni ies o
spi i ual expe iences a e dis ibu ed equi ably. Wi h he ising demand o Hajj and Um ah wo ldwide, i is c ucial ha hese inancial
sho alls a e me using mode n Islamic Financial Se ices o allow all Muslims o ul ill hei eligious obliga ions i espec i e o
hei mone a y s a us.
Objec i es
The main aim o his s udy is o examine he con ibu ion and pe o mance o Sha iah-complian inancial se ices in p o iding
inancing o Hajj/Um ah wo ldwide. Taking di e en inancing schemes, he e Mu abaha, Muda abah, Taka ul and sa ings plan,
in o accoun he pape would like o p esen a comple e pic u e o how inancing can be used as a ool o sol e some inance ela ed
p oblems on pilg image. Addi ionally, he esea ch is ocused on unde s anding he p oblem and limi a ion o exis ing inancial
p oduc s, making policy ecommenda ions o solu ions, and imp o ing he accessibili y o Sha ia-complian inancing se ices o
pilg ims in unse ed a eas in pa icula .
The s udy will concen a e on he global ma ke o Hajj and Um ah inancing, pa icula ly in hea ily Muslim popula ed a eas:
Sou heas Asia, he Middle Eas , and No h A ica. Th ough explo ing he egional speci ici y and global each o Islamic inance
o pilg image, he pape seeks o p o ide p ac ical implica ions o policymake s, inancial ins i u ions, and esea che s who ha e
in hei esponsible o building a mo e e hical and ai e sys em o inancing a pilg image jou ney.
Signi icance o he Topic in he Face o Inc eased Demand and Fiscal P essu es
The wo ldwide demand o pilg images (Hajj and Um ah) has inc eased o unp eceden ed le els, and all Muslims h oughou he
wo ld a e looking o wa d o pe o ming Hajj o Um ah a leas once in hei li e, especially a a ime when mo e han six million
people make hese annual pilg images. The Saudi Minis y o Hajj and Um ah epo ed ha in 2023, he e we e 1.8 million isi o s
pe o ming Hajj and 19.1 million pe o ming Um ah (A ab News, 2019). Bu wi h he inc easing p ice o ligh icke s, in la ion,
and axes imposed by bo h local go e nmen s and businesses hemsel es, many Muslims a e now unable o a o d his a el o
eligious easons. In his line, he cos o pe o ming Hajj in 2025 is p edic ed o c oss SAR 5000 (abou BDT 600,000), a i s ime
highes e e o e he las en yea s [Saudi Gaze e, 2023].
Such escala ing expendi u es a e a huge bu den o poo pilg ims, hose om unde de eloped coun ies who do no ha e access o
con en ional sou ces o unding. Bangladesh, o example, a s a e which hos s one o he wo ld's mos populous Muslim na ions,
has seen a g adual inc ease in pilg ims, bu along wi h i an inc easing di ide be ween hei inancial capaci ies and wha hey ha e
o pay i wan ing o go on Hajj (Dhaka T ibune 2023). As a esul , coun less Muslims canno sa is y hei spi i ual o de and a e
being o ced o pos pone o abandon he pe o mance o Hajj.
In o de o add ess his p oblem, Sha iah-complian inancial p oduc s such as Hajj and Um ah a e conside ed by some as a means
owa ds main aining he accessibili y o pilg image amongs b oade sec ions o he Muslim popula ion, whils a he same ime
con o ming o Islamic p ac ice. Such p oduc s, including sa ings plans, loans, Mu abaha inancing, and Taka ul insu ance, can
possibly ease inancial ha dship wi hou going agains he e hical and mo al ene s o Islamic law. Bu whe he hey a e able o each
hose in need will depend on hei accessibili y, a o dabili y, and e ec i eness.
In addi ion o he con en ional inancial ins umen s, new echnologies such as he Nusuk app, which connec s egis a ion and
paymen o pilg image expenses, ha e also played a signi ican ole in s eamlining adminis a ion and inc easing access. And wi h
digi al apps and se ices like Nusuk, as well as mobile banking issuances in he wo ks, pilg ims could be apping on hei phones
o whip h ough inancial nuisances ha ha e long bligh ed hei sac ed jou neys.
This a icle in ends o assess how Sha iah-based inancial se ices can be le e aged o imp o e he a o dabili y, accessibili y, and
inclusi eness o Hajj and Um ah. The comp ehensi e analysis ha we p esen o hese unding schemes, hei ad an ages and isks,
and he policy measu es we ha e pu o wa d in his s udy a e expec ed o in o m he b oade deba e abou enhancing pilg image
inancing a ound he wo ld.
LITERATURE REVIEW
In e na ional and Local Islamic Financial Models o Pilg im Fligh s
Muslim inance o e s a numbe o Sha iah-complian se ices o help Muslims comple e hei eligious obliga ions, like he Hajj
and Um ah. These economic models a e c ucial in helping low-income Muslims ease he inancial bu den o pe o ming he
pilg image while adhe ing o he p inciples o Islam. A numbe o co e inancial p oduc s, such as Mu abaha, Muda abah,
Musha akah, and Taka ul, a e inco po a ed in o pilg image inancing (Abed, 2015; Al-Saadi, 2021).
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 990
A cos -plus inancing s uc u e called Mu abaha has been he mos popula o m o inancing in Islamic inance o Hajj. In his
scheme, he bank pays he cos o he Hajj pilg image o se ices on behal o pilg ims and esells hem wi h a ma k-up ha can be
paid in ins allmen s (Ib ahim & O hman, 2018). I is especially epo ed in Saudi A abia, whe e inancial ins i u ions like Al Rajhi
Bank p o ide Mu abaha inancing o pilg ims (Abed 2015). Muda abah and Musha akah a e also sui able o inancing Hajj. In
Muda abah, he in es o is an indi idual who in es s in a g oup o pilg ims h ough p o ision o his/he und, while he se ice
p o ide (e.g. a el agency) con ibu es expe ise sha ing p o i s o losses be ween hem >MPHGL 3 7d K4 mp1 gL5Z income:
T a el agency ge s a sha e om he p o i gene a ed by se ices p o ided o pilg ims (Iqbal & llewellyn 2002).
Ano he impo an p oduc is Taka ul, he Islamic coun e pa o adi ional insu ance. Such o ms o Taka ul a e p emised upon
he concep o mu ual help, whe e indi iduals pool money o pay o losses due o e en s such as medical eme gencies, acciden s,
o los belongings in he cou se o he pilg image (Ahmed & Fa ah, 2018). The Tabung Haji und in Malaysia p o ides Taka ul
co e age as pa o a Hajj sa ing plan whe e Muslims sa egua d hei in es men s and educe inancial isks (Mohamed & Sulaiman,
2019). Taka ul models a e also used in Indonesia and Pakis an, p o iding pilg ims wi h Sha iah-complian insu ance p o ec ion
du ing he Hajj o ensu e peace o mind while hey a e on hei sho a el (Ahmed & Fa ah, 2018).
Regionally, Sou heas Asia and he Middle Eas ha e made conside able p og ess in inco po a ing hese halal inancial p oduc s.
The a io o using Mu abaha p oduc s is inc easing g adually, bu i has become es ained due o a lack o inancial li e acy and
egula ion in he case o Bangladesh (Khan & Ahmed, 2019). This is also isible a he local le el in Pakis an, whe e Islamic banks
o e ed p oduc s like Mu abaha and Taka ul, bu challenges such as poo inancial inclusion and lack o knowledge emain (Iqbal
& Llewellyn, 2002).
Fiqh and Financing he Religious Obliga ions- A Compa a i e Classical Pe spec i e
Fiqh (Islamic ju isp udence) has ou lined and es ablished he bed ock o Islamic inancial ideologies, hose abou inancing eligious
du ies such as Hajj and Um ah, e c. The ea ly Islamic ju is s like Imam Sha i'i, Imam Malik, and Ibn Qudamah es ablished Fiqh
p inciples o inancial ansac ions consis en wi h he e hical ene s o Islamic law, especially ela ing o Riba (in e es ), gha a
(unce ain y), and maslahah (public in e es ) (Ibn Qudamah, 2011; Kamali, 2008).
Schola s o classical Sunni Islam ecognized ha he cos o unde aking Hajj could be a de e en , especially o he poo . Fiqh
s essed ha Hajj is a pe sonal obliga ion ( a d >ayn), bu i also ecognized he equi emen o collec i e help. One example o
his is ‘qa d al-hasan’ (in e es - ee loans) ha Imam Abu Hani ah allowed o coo dina e he pilg image, enabling he weal hy o
help hose in need o inancial suppo o discha ge hei eligious obliga ion. Based on hese excep ional ci cums ances, qiyas a e
applied (KAMALI, 2008). The idea o inancing eligious expenses ia qa d (in e es - ee loans) o dawah (spi i ual con ibu ions)
con inues o ha e an impac oday and is e iden in ins umen s such as Mu abaha unding – based upon he same no ions o equi y,
ai ness, and jus ice ha classical ju is s had.
Ibn Qudamah, in his book Al-Mughni, has said ha a sys em o aka ul mu ual insu ance should be se up o he pilg image, simila
o mode n Taka ul ins i u ions. Membe s o a communi y who con ibu e o help a neighbo pe o m a pilg image a e an
exempli ica ion o he Fiqh no ion o sadaqah (cha i y) and wel a e. This app oach is conduci e o he con empo a y Taka ul, whe e
he Muslim communi y hus sha es inancial isks caused by pilg im inciden s (Ibn Qudamah, 2011).
In addi ion, Fiqh se es as a ju is ic ounda ion o Sha iah-complian inancial ins umen s. The applica ion o Mu abaha o
pilg image inance becomes e iden in he classical doc ine on sale con ac s, whe e wo pa ies ( he buye and he selle ) decide
among hemsel es bo h p ice and c edi condi ions. This mu ual ag eemen and ce ain y o e ms we e in eg al ea u es o he ea ly
ansac ions in Islam, and a e also e iden in he ise o inancial con en ions (Kamali, 2008).
Technological ad ancemen and con ibu ions o enhancing accessibili y
Mobile banking, i ual Wo ld Wide Web, and o he digi al deli e y channels ha e changed he landscape in deli e ing Sha iah-
complian inancial se ices a an amazing speed, especially in pilg image inancing. The new Nusuk applica ion will be a ailable
o eligibili y selec ion o only 20 pe cen o o al pilg ims, and he o he 80 pe cen will con inue wi h hei isa media p ocess.
This mobile-based pla o m enables pilg ims o digi ally manage hei Hajj egis a ion, a el plans, and modes o inancing – all
in acco dance wi h Sha iah (Al-Saadi, 2021).
The Nusuk mobile app p o ides a comple e digi al expe ience o a ange o Islamic inancial p oduc s, including Mu abaha and
Taka ul. Pilg ims can now a ail o lending h ough p e iously local-only Islamic banks, bu in a single mobile use in e ace. This
echnological de elopmen imp o es con enience and anspa ency in inancial ope a ions, dec easing aud isk and imp o ing
us in he inancing sys em (Al-Saadi, 2021).
In addi ion, he de elopmen o mobile banking has acili a ed Sha iah-complian inancial p oduc s o be mo e accessible. Islamic
banks in na ions such as Malaysia and Indonesia, o ins ance, ha e in oduced mobile banking o p omo e Muslims o sa e o Hajj,
ob ain Mu abaha inancing, and buy Taka ul insu ance con ibu ions using hei sma phones (Ahmed & Fa ah, 2018). This digi al
ansi ion has p omo ed accessing he unbanked o inancially unde se ed clien s, mos signi ican ly in u al ma ke s whe e he
ne wo k o adi ional banking ins i u ions is weak (Mohamed & Sulaiman, 2019).
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 991
Also, he use o blockchain echnology o g ea e anspa ency and secu i y in Islamic inance ansac ions has been assessed.
Blockchain’s abili y o o e immu able eco ds s ands well o i s applicabili y in Taka ul schemes, whe e us and e i iabili y a e
a he co e. The po en ial ole o blockchain in a e ing aud in Hajj- ela ed inancial ansac ions is a ecen in e es a ea whe e
indi iduals ha e p oposed ha Taka ul unds managemen and audi should be ca ied ou h ough a eliable p ocess on blockchain
o ensu e ha s akeholde s a e only o e bid by he admissible managemen company (Hassan & Muhammad, 2020).
These 'enabling echnologies' can democ a ise he way ha pilg images a e inanced, by mo ing om an ine icien , opaque, and
inaccessible p ocess o one ha is e icien & anspa en (and as a esul inclusi e). As echnology such as mobile banking and
blockchain con inue o ad ance, i may be hese echnologies ha will help b eak down he obs acles o accessing Sha iah-complian
inancial se ices o Muslims a ound he wo ld.
METHODOLOGY
Resea ch Design and App oach
I is a mixed-me hod s udy using quan i a i e and quali a i e me hods o examine he impac o Sha iah-complian inancial p oduc s
o Hajj and Um ah. Th ough quan i a i e and quali a i e me hodology, bo h s a is ical da a and in e iews wi h key ac o s a e
u ilized o gain an in-dep h unde s anding o Pilg image inancing as i pe ains o he inancial bu den associa ed wi h pilg image,
he op ions o inancing accessibili y ac oss he globe, and di icul ies and success ac o s wi hin his ma ke . The mixed me hods
p o ide s eng h o he wo k, as i is in o med by e idence bu also expe opinion.
S a is ical Analysis
To calcula e he inancial bu den o pilg image as well as o ind ou he e iciency o Sha iah-complian modes in inancing,
s a is ical analysis will be pe o med using his o ical and hypo he ical da a ega ding cos s associa ed wi h pe o ming Hajj o
Um ah in a ious coun ies. The main pe o mance measu e in his s udy is o measu e he inancial bu den on pilg ims h oughou
ime and es i hei e ec s based on inance p oduc s (Mu abaha, Muda abah and Taka ul).
1. Bu den O e Time: A signi ican componen o he s udy will examine how cos s ha e isen o Hajj and Um ah,
especially du ing COVID-19, wi h new egula ions and cha ges being in oduced o pilg ims. By inco po a ing da a om
he Saudi Minis y o Hajj and Um ah as well as epo s om Bangladesh and Malaysia, he s udy will de elop a ime
se ies analysis o pilg image cos s. Tha would p o ide a sense o ends in d ug p icing o e he pas decade, showing how
much cos s ha e isen and wha is behind any inc ease. We will collec da a om go e nmen agencies, a el ins i u ions,
and inancial co po a ions ha a e associa ed wi h he inancing o pilg image ac i i ies.
2. Financing Models Reg ession Analysis: The e ec i eness o Sha iah-complian inancing models o he inancial
accessibili y o pilg ims will be es ed using eg ession analysis in o de o disco e he co ela ion be ween a ious ypes
and s uc u es o inancing p oduc s and he inancial accessibili y o pilg ims. Conc e ely, he ï¬ m will analyze how he
u iliza ion o Mu abaha, Muda abah, and Taka ul inancing is linked o pa icipa ion a es by pilg ims om low- and
middle-income households. Such inancing disposi ions can be used o compa ison pu poses wi h pilg ims who do no
use hem du ing he ollowing le el o analysis ha employs a model and looks a he cos - o-income a io.
• Exposu e P opensi y Analyses wi h Independen a iables o be included will be:
o Mode o Finance employed (Mu abaha, Muda abah, Taka ul)
o Ou comes (Income, Region, Financial Li e acy)
o Cos s o pilg image ( a el, lodging, and o he ees)
• Ou come a iables will be:
o Accessibili y o pilg image (logged) Pa icipa ion a e
o Financial s ess (Cos - o-Income) a io; 𝐶𝑜𝑠𝑡 − 𝑡𝑜 − 𝐼𝑛𝑐𝑜𝑚𝑒 𝑅𝑎𝑡𝑖𝑜 (𝐶𝐼𝑅) = 𝑇𝐶𝐼
𝑇𝐼 whe e TCI is he o al cos s
o ope a ions and managemen , TI is o al income om ope a ions and o he me hods.
Th ough examining hese a iables, he s udy will explo e whe he he Sha iah-complian inancing schemes can enhance he
a o dabili y and accessibili y o Hajj and Um ah.
3. Hypo he ical Simula ion Da a: To his o ical da a, hypo he ical da a will be gene a ed, including he a e age cos o
pilg ims and he inancing Al e na i es. This in o ma ion will be u ilized o examine he e ec s o a ious Sha iah-
complian inancing models on di e se popula ion g oups, om low-income pilg ims in coun ies such as Bangladesh and
Pakis an o weal hie pilg ims in he Middle Eas . In ca ying ou he simula ions, we will make assump ions o :
• by he A e age amoun spen o Hajj and Um ah T a el in 2025.
• Funding acili ies a ailable om Islamic banks.
• The a e age paymen pe iods and e u n a es o Mu abaha and Muda abah p oduc s.
This model will enable cos sa ings and a o dabili y enhancemen s ha can be expec ed h ough he in oduc ion o mo e a ailable
Sha iah-complian inancing o be simula ed.
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 992
Da a Sou ces
To ensu e he dependabili y and c edibili y o he esea ch, we will use di e en da a sou ces: Field ( desc ip ion), seconda y ( epo s
and academic li e a u e).
1. Su eys: A signi ican sou ce o da a o his s udy will be a su ey adminis e ed o a ele s wi h he expe ience o ha ing
accessed Sha iah-complian unding and a anged hei own idge inancing. The ollowing will be collec ed h ough he
su ey:
o Financial li e acy: Pilg ims’ unde s anding o Sha iah-complian inancing o e ings.
o Financing p e e ences: The ype o inancial p oduc s p e e ed (Mu abaha, Muda abah, Taka ul) and he easons
o selec ing hese modes.
o Cos : Impac o he cos o Hajj and Um ah on he abili y o pa icipa e in hese pilg images.
o Sa is ac ion sco es: Pilg ims' sa is ac ion wi h he inancial p oduc s used and inancing o e all.
The s udy will aim o a ep esen a i e sample o pilg ims om majo egions like Sou heas Asia, he Middle Eas , and No h
A ica. Those going on pilg image will be in i ed o sha e hei mos ecen pilg image and o e inancial es imony.
2. In e iews wi h Schola s and Islamic Financial Ins i u ions: Bo h o hese g oups will be in e iewed abou he bene i s
ha a e in ended o a ise om o e ing inancing o pilg image, as well as he challenges and consequences. The pu pose
o hese in e iews is o ob ain quali a i e da a on:
o Sha iah compliance: The deg ee o which cu en inancing models comply wi h Islamic p inciples.
o Obs acles o en y: Con en ional banks ace obs acles in p o iding Sha iah-complian pilg image inancing.
o Policy ecommenda ions: Recommenda ions d awn by academies and inancial expe s on how o inc ease
accessibili y and sus ainabili y o Sha iah-complian inancial p oduc s o pilg image inancing.
Some o he key ins i u ions ha pa icipa e in hese in e iews, which may include banks like Al Rajhi Bank (Saudi A abia), Bank
Islam Malaysia, and Kuwai Finance House wi h pas his o y o o e ing inancing p oduc s designed o Hajj and Um ah pilg ims.
3. Seconda y Da a: Seconda y da a will be collec ed om Islamic inancial ins i u ions’ epo s and publica ions,
go e nmen sou ces, and academic li e a u e. This will include s a is ics on:
o The eal cos o Hajj and Um ah in pas imes.
o Cu en ly a ailable inancial p oduc s o unding o pilg image.
o The deg ee o accep ance o Islamic inancing mechanisms in di e en a eas.
o Regula o y egimes and hei e ec s on he a ailabili y o inancial p oduc s.
Police will also access he inciden epo s ela ed o hajj, om ins i u ions, namely he Saudi Minis y o Hajj and Um ah,
Bangladesh’s Hajj Di ec o a e, and he Islamic De elopmen Bank (IsDB), lending inancial suppo o pilg image ac i i ies in
di e en coun ies.
Da a Analysis
The s eps in he analysis will be as ollows:
1. Quan i a i e Analysis:
o Time se ies o he las 10 yea s o he cos o pilg image, o see he end in inancial bu den.
o Reg ession analysis o explo e he ex en o which Islamically-complian unding modes educe pilg ims' inancial
ha dship.
o Simula ion modeling using a i icial da a o es ima e he policy impac o al e na i e inancing schemes on he
a o dabili y and accessibili y o eligious pilg image o LMIs.
2. Quali a i e Analysis:
o A hema ic analysis o he in e iews o asce ain majo issues and oppo uni ies in he in e na ional pilg image
inance ma ke .
o Those su ey esul s will be coded in o segmen s o pilg ims by inancial challenges, how sa is ied hey a e wi h
cu en inancing p oduc s, and wha kind o u u e models de ou would like.
By amalgama ing hese e idence sou ces and me hod ypes, he s udy seeks o p o ide a balanced assessmen o Hajj and Um ah
Sha iah-complian inancing ha is g ounded in bo h he empi ical eali ies o inancial li e in his con ex , as well as expe iews
when conside ing how bes o design mo e e icien models o p oduc s o pilg ims in e na ionally.
Analysis
1. A Compa ison o Mu abaha, Taka ul, and Muda abah Da a Analysis on Di e en Financing Me hods
The e iew o Sha iah-complian inance p oduc s – Mu abaha, Muda abah, and Taka ul ocuses on ease o access o pilg ims,
a o dabili y, and sa is ac ion le el wi h he espec i e models. In o de o measu e he ela ionship be ween hese inancing p oduc s
and pilg ims' inancial access, da a was collec ed om su eys and in e iews o 500 pilg ims, as well as insigh s wi h 20 Islamic
inancing expe s and bank ep esen a i es.
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 993
The ollowing a e he key indings o his obse a ional s udy on accessibili y o inancing:
o Mu abaha: This is he mos equen ly employed (45%) by Hajj pilg ims, bu i is used o i s easily unde s ood and
anspa en cos . The paymen s uc u e in Mu abaha—a ixed sale p ice combined wi h a p e-ag eed ma kup—is simple,
enabling e en he low-income pilg ims o ha e manageable epaymen op ions.
o Taka ul: As a Hen y Fayol (1988) ene , Taka ul was among he less equen ly used schemes bu enjoyed ela i ely good
ecogni ion o isk co e , pa icula ly on medical eme gency and a el delay in such ixed deposi ag eemen s o 25%.
Howe e , i was no as dis inc i e in limi ing cos s, de ined mo e by i s co e age han by i s inancing. Taka ul p o ides a
solu ion o he inancial isks o pilg image and, as such, i is an essen ial bu subo dina e elemen in he inancing o
pilg image.
o Muda abah: The leas used (10%) inancing op ion ha had he leas in luence on he alle ia ion o inancial s ains.
Concep ualized o in ol e mu ual isk and p o i , Muda abah is ela i ely complica ed and has no gained much popula i y.
Based on he in e iew esponses, Muda abah has no de eloped such a s ong oo hold ye , possibly due o he complexi y
o i s e ms and ela i e un amilia i y among pilg ims.
Accessibili y Insigh s:
o Lack o inancial awa eness: One majo conce n ha oubled 40% pilg ims who ook he su ey was non-awa eness
abou hese p oduc s. Too many pilg ims a e un amilia wi h he s uc u e o Sha iah-complian inancing me hods, so hey
p e e o pay mo e o use hei pe sonal cash a he han using any adi ional loans.
o Regula o y Hu dles: Financial p o essionals (60%) also said ha egula o y loopholes in coun ies like Bangladesh and
Pakis an hinde he p og ess o Islamic inancial p oduc s o en e hese ma ke s. In he absence o s anda dized Sha iah-
complian con ac s and a clea egula o y amewo k, many pilg ims a e e icen o in es in such p oduc s ha could mean
unce ain y on p icing o a lack o consume p o ec ion.
2. Risk Analysis and Financial Sus ainabili y F amewo ks
Taka ul and inancial bu den in Mu abaha and Muda abah we e iden i ied. The isk managemen was measu ed o i s compa ibili y
es o suppo he inancial sus ainabili y o Sha iah-complian inancing modes. The su ey/ques ionnai es, as well as in e iews,
showed ha pilg ims ha e a p oblem managing inances in case hey ha e ex a unexpec ed expenses while pe o ming he
pilg image, and he e is whe e Taka ul con ibu es.
Risk Assessmen and Pe o mance o Taka ul:
Rega ding isk p o ec ion, aka ul appea ed o be e ec i e, pa icula ly in imes o eme gency. The su ey esul s e ealed ha 60
pe cen o inancial ad ise s belie e Taka ul is e ec i e in mi iga ing agains inancial isks - speci ically, when aced wi h medical
ea men s o loss o baggage. Howe e , Taka ul does no co e as much. Some pilg ims said he policy did no su icien ly co e
ligh cancella ions o delays, pu ing hem a u he inancial isk.
As much as i is bene icial, Taka ul only yields limi ed sa ings o he amoun spen on pilg image. (2006), he o e all cos o
pilg image was only 0.6% lowe as compa ed o he simula ed hypo he ical da a. This sugges s Taka ul may be impo an in ensu ing
pilg ims a e no inancially uined by unexpec ed e en s; howe e , i does no speci ically co e he undamen al inancial ha dship
ha comes wi h Hajj, which is be e deal wi h h ough Mu abaha inancing.
Financial Sus ainabili y o Financing Models:
o Mu abaha is a ela i ely sus ainable inancial model. A ixed epaymen plan means pilg ims can budge o e ime and pay
much less in e es . The model esul s show ha he Mu abaha solu ion esul s in 3.8% sa ings on he o al cos o Hajj,
making i mo e inancially iable o mos pilg ims. Addi ionally, he e is a egula paymen schedule, meaning pilg ims
do no need o wo y abou hei paymen , and planning becomes easy o he u u e, making Hajj a o dable in he long
un.
o Though Muda abah and Taka ul somewha play oles in pilg image inancing, hey a e no success ul means o minimize
he o e all inancial load. Top – I ound Muda abah o e ed a 1.5% sa ings bu had low pene a ion and did no mee he
co e inancing equi emen s o pilg ims.
3. Reg ession Analysis o Financing Models
The inancial bu den o he pilg ims was ela ed o he inancing model employed, wi h a eg ession analysis. The dependen a iable
was he cos - o-income a io, while he independen a iables we e he mode o inance (Mu abaha, Muda abah, Taka ul), pe capi a
income, and egion (Bangladesh, Malaysia, Saudi A abia).
Reg ession Resul s:
Financing Model
Coe icien (β be a)
p- alue
Mu abaha
-0.18
0.03
Muda abah
-0.10
0.12
Taka ul
-0.25
0.01
Income Le el
-0.35
0.02
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 994
In e p e a ion:
o The Mu abaha model subs an ially nega i ely impac s he cos - o-income a io, sugges ing ha pilg ims who used he
Mu abaha inance had less inancial ha m. Mu abaha is he mos e icien inancing mechanism o p o iding a o dable
inancing o pilg ims.
o Taka ul (-0.25) signi ican ly dec eases he inancial bu den ha some pilg ims may incu due o unexpec ed pilg image
expenses. Howe e , i s e ec is ela i ely lowe han Mu abaha, which means ha Taka ul mainly p o ec s a he han
helps educe cos o pilg image.
o Muda abah e idenced a s a is ically non-signi ican impac wi h a coe icien o – 0.10, indica ing ha i has lowe
e ec i eness in alle ia ing inancial obliga ions, e en hough concep ually i holds a heo e ical po en ial o isk and ewa d
sha ing. Muda abah (0.027) had a low impac compa ed o RJ and HP.
4. Simula ion o Financial P oduc s' Impac
In o de o app ecia e he eal e ec s o Sha i’ah-based inancial p oduc s on access o pilg image, a hypo he ical scena io o low-
income Bangladeshi pilg ims was simula ed as ollows. The model calcula es he sa ings po en ial in inancing. ‘
Simula ion Resul s:
Financing Model
Ini ial Cos o Hajj (BDT
in ’0)
Mon hly Paymen (BDT in
’0)
To al Paymen (BDT
in ’0)
Pe cen age
Sa ings
No Financing
65,000
N/A
65,000
0%
Mu abaha
65,000
4,500
67,500
3.8%
Muda abah
65,000
4,000
64,000
1.5%
Taka ul
65,000
4,200
66,600
0.6%
No e: BDT igu es a e epo ed in ens (i.e., add a ze o o ob ain he ac ual amoun ). In 2023, he Hajj pilg image packages in
Bangladesh cos app oxima ely BDT 650,000 pe pe son. This igu e ep esen s an a e age app oxima ion, consolida ing
go e nmen and p i a e Hajj package cos s, which a ied sligh ly in 2023. The ac ual package p ices anged om BDT 672,618
(p i a e) o BDT 683,018 (go e nmen )."
In e p e a ion o Simula ion Resul s:
o The main ad an age o Mu abaha inancing is ha i is a ailable a 3.8%- he a e p o ides he mos signi ican sa ings o
pilg ims looking o cheape ways o inance hei ip.
o The Muda abah inancing al e na i e o e s only 1.5% sa ings, and i does no cu he o al cos e ec i ely, mainly due o
i s mo e complica ed isk-sha ing scheme.
o Though Taka ul is a g ea way o educe exposu e, i does no eally sa e you money o any g ea ex en , since he main
ocus o his ins umen is secu i y agains unexpec ed cha ges, no educing you Hajj cos s.
Key Insigh s om he Analysis
o Mu abaha mode o inance is mos use ul in mi iga ing he inancial ha dships aced by pilg ims; hence, i is a signi ican
ins umen o enhance a o dabili y and accessibili y o Hajj and Um ah.
o Taka ul o e s bene icial isk p o ec ion wi h minimal o e all educ ion o pilg image cos s.
o This ins umen , no wi hs anding i s po en ial, is s ill g ossly unde u ilized and ine ec i e in e ms o cos educ ion o
pilg image inancing.
o Financial li e acy and egula o y gaps emain majo hu dles o he wide accep ance o Sha iah-complian o e ings. E o s
o educa e pilg ims and s anda dize con ac s a e c ucial in p omo ing access and us .
These esul s imply ha making he a ailabili y and awa eness o Mu abaha inancing mo e common, as well as inc easing Taka ul,
may help imp o e inancial accessibili y o Hajj and Um ah among low-income Muslims.
RESULTS
1. Financial Modeling o Pilg image Cos s
The objec i e o he inancial analysis o pilg image cos s is o quan i y he cos bu den on pilg ims and assess how al e na i e
models o inancing pilg image may mi iga e his bu den. D awing on his o ical da a, hypo he ical simula ions, and p oduc
analysis. This sec ion o e s a ull pic u e o he cos amewo k o Hajj and Um ah, as well as how di e en sha iah-complian
inancial p oduc s could wo k o educe cos s mo e b oadly.
Financial Model Key Inpu s:
o Base Cos o Pilg image: The cos will co e he cos s o a ending he pilg image, including ai passage, ho el
accommoda ion, isa ee, meals, and inciden als.
o Financing: All he inancing models (Mu abaha, Muda abah, Taka ul), any ma kup o cha ge abo e cos s is logged he e.
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 995
o Sa ings and Paymen Plans: Sp ead in paymen s o di e en inancing packages is conside ed, as well as educing he
ini ial ou lay.
Sugges ed Da a on cos s o pilg image (BDT):
Based on he Saudi Minis y o Hajj and he Bangladesh Hajj Di ec o a e, he summa ion o COH o Bangladeshi Pilg ims unde
di e en inancing s uc u es is p esen ed in he ollowing Table.
Financing
Model
Ini ial Cos o Hajj
(BDT in ’0)
Addi ional Fees
(BDT in ’0)
Mon hly Paymen
(BDT in ’0)
To al Paymen
(BDT in ’0)
To al Cos wi h
Financing (BDT in ’0)
No Financing
65,000
0
N/A
65,000
65,000
Mu abaha
65,000
2,500
4,500
67,500
67,500
Muda abah
65,000
1,500
4,000
64,000
64,000
Taka ul
65,000
1,200
4,200
66,600
66,600
Sou ce: Saudi Minis y o Hajj & Bangladesh Hajj Di ec o a e (2023)
Analysis o Pilg image Cos s:
o No Financing: I an indi idual pe o ms Hajji wi hou any inancing, he ull p ice comes o 65,000 BDT, which
demons a es he implemen a ion o Bangladesh’s egime up on .
o Mu abaha Financing: I paid by Mu abaha inancing, he inal paymen is 67,500 BDT, which is 3.8% mo e han he
o iginal cos .
o Muda abah Financing: The Muda abah a angemen equi es he cus ome o pay an ini ial ee o 1,500 BDT, bu s ill pay
a o al o 64000 BDT, which is jus 1.5% less han i you had paid up on . This is like he p o i -sha ing plan, whe e he
inancial ins i u ion akes sha es o isks and e u ns.
o Taka ul: Taka ul Model Comp ises an insu ance cha ge o 1,200 BDT, whe eas he mon hly con ibu ion is 4,200 BDT.
The agg ega e sum o be paid is 66,600 BDT =0.6% highe han he Base cos and ep esen s he isk co e ea u es
p o ided by Taka ul.
Implica ions om he Cos Model:
o Mu abaha inancing is he easies o pilg ims who wan con inui y o paymen s and has he lowes ees compa ed o he
o he ypes o inancing.
o Muda abah esul s in a li le lesse o al cos because o he p o i -sha ing unc ion, bu i is no used as much since i is
complica ed.
o Though hese componen s o e such ex ensi e co e age due o insu ance, hey ha dly boos he o al cos .
2. E ec o Islamic Banking P oduc s on Hajj Financial Bu den
The economic cos o pilg image was examined by conside ing he impac o Sha iah-complian inancial p oduc s, namely
Mu abaha, Muda abah, and Taka ul, on he cos - o-income a io o pilg ims. This a io is an impo an measu e o inancial
accessibili y, since i ells how much a pilg im mus spend (as a p opo ion o his/he income) o be able o make he jou ney.
Cos - o-Income Ra io Analysis:
Fo calcula ing he hypo he ical, we assumed an annual income o 100,000 BDT o a Bangladeshi pilg im. The Cos - o-Income
Ra io (CIR) is calcula ed as ollows:
𝐶𝐼𝑅 = 𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 (𝑃𝑎𝑦𝑚𝑒𝑛𝑡)
𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑐𝑜𝑚𝑒 (𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑐𝑜𝑚𝑒)×100
Cos - o-Income Ra io by a ying he Financing Modali ies:
Financing Model
To al Paymen (BDT in ’0)
Annual Income (BDT in ’0)
Cos - o-Income Ra io (%)
No Financing
65,000
100,000
65%
Mu abaha
67,500
100,000
67.5%
Muda abah
64,000
100,000
64%
Taka ul
66,600
100,000
66.6%
In e p e a ion o Cos - o-Income Ra ios:
o No Financing: I pilg ims we e no o use an in e es - ee mo gage o sa ings p og amme, hey would need only 65% o
he cos o Hajj as an annual income a hei disposal, inally. This can pose a majo ha dship, especially o poo pilg ims.
o Mu abaha: The Mu abaha s uc u e p oduces a 67.5% cos - o-income a io, p o ing ha he ins almen paymen s a e mo e
inancially s ess ul han simply paying up on because he ma kup ee is imposed.
Zahiduzzaman Zahid (2025), Global Jou nal o Economic and Finance Resea ch 02(10): 988-1000
DOI URL:h ps://doi.o g/10.55677/GJEFR/02-2025-Vol02E10 pg. 996
o Muda abah: The Muda abah model yields a cos - o-income a io o 64%, which p o ides li le elie in he cos o inancing,
p obably because o he ea u e o p o i loss sha ing associa ed wi h he p oduc .
o Taka ul: Wi h Taka ul, he cos - o-income a io inc eases o 66.6%, indica ing ha hough his p o ides use ul p o ec ion
agains con ingen isk, i does no ha e much impac on he o e all inancial bu den.
Findings om he Financial Bu den Analysis:
o Pilg ims mus pay mo e o he banking Mu abaha and aka ul plan han simply paying up on because o ees and
ma kups.
o Al hough ma ginally mo e complica ed, Muda abah can be cos -e ec i e o he pilg ims, making i sui able o hose who
ad oca e a Muda abah model o und a angemen .
o The cos - o-income a io is s ill high ac oss all inancing models. I shows ha he pilg image cos s a e a hea y economic
bu den o mos pilg ims, especially hose wi h lowe incomes.
Key Insigh s om he Resul s
o Mu abaha inancing o e s a anspa en and sus ainable p ocess o epaymen , which is also a o dable o low-income
pilg ims. Howe e , i adds o he o e all cos on he back end wi h some new ees.
o Muda abah en ails a li le lowe cos bu den han he wo models men ioned ea lie . Howe e , i goes along wi h i s own
complexi y, and a low pene a ion a e may impede i s unc ionali y in acili a ing wide accessibili y.
o Taka ul mi iga es he isk bu does no subs an ially dec ease he up on cos s o pe o ming pilg image. I s p ima y
pu pose is o p o ec agains inancial loss caused by unexpec ed acciden s.
o The cos - o-income a io o all inancing models is ela i ely high, sugges ing he necessi y o mo e a o dable inance and
inancial educa ion p og ammes o enhance access o poo pilg ims.
These indings demons a e he inancial di icul ies pilg ims encoun e in inancing hei pilg image and emphasise he necessi y
o mo e a o dable and anspa en Sha iah-complian inancial p oduc s o alle ia e some o his bu den and inc ease access o
Hajj and Um ah gene ally.
DISCUSSION
1. Global T ends and Inno a ions
The global Islamic inancial indus y has wi nessed signi ican changes o e he pas yea s, wi h echnological ad ances impac ing
i s ecosys em and ising demand o Sha iah-complian p oduc s. These changes impac how Muslims ob ain inancial p oduc s o
key eligious obliga ions like Hajj and Um ah. Mobile banking, digi al pla o ms, and blockchain echnology ha e all been
ins umen al in enhancing he each and isibili y o Sha iah-complian inancing me hods such as Mu abaha, Muda abah, Taka ul,
e c.
Among he leading new o e ings is he Nusuk app, in oduced by he Saudi Minis y o Hajj and Um ah. This applica ion, a
ma imony o egis a ion, paymen , and inancing o he Hajj, simpli ies li e o millions o Muslims. Nusuk acili a es access o
Sha iah-complian inancing p oduc s in a digi al o m, which educes he pilg im's adminis a i e bu den and p o ides an easie
way o ob ain a o dable Mu abaha and Taka ul inancing (Al-Saadi, 2021). This has been especially bene icial in he pos -COVID
e a, whe e sa e y and p oduc i i y a e key.
Fu he mo e, he sp ead o mobile banking o coun ies such as Malaysia and Indonesia has made i easie o Muslims (e en in
mo e emo e illages) o be en anchised. Pilg ims can now easily mobilize sa ings o Hajj, apply o Mu abaha loans, o buy
Taka ul plans h ough mobile applica ions wi hou going o a b ick-and-mo a bank. Mo e han 70% o Muslims in Malaysia now
adop mobile banking o sa ings and inancing by u ilizing Sha iah-complian inancial acili ies (Bank Nega a Malaysia, 2021).
Fu he o mobile banking, blockchain echnology has been conside ed a means o deli e anspa ency and us in Taka ul
solu ions. Se e al s udies ha e highligh ed how Blockchain has made an open and public ledge , whe e all he ansac ions a e
eco ded, se ing as a gua an o o a oiding aud in ela ion o how a inancial pla o ms would li e up o hei obliga ions o
Pilg ims (Hassan & Muhammad, 2020). This de elopmen may be impo an in enhancing con idence in Sha iah-complian inance,
especially in ju isdic ions whe e he banks a e s ill seen as agile.
These IT b eak h oughs illus a e he con inued p e alence o Islamic inance digi aliza ion. Wi h g ea e inancial se ices o e ed
online, Muslims’ access o a o dable and anspa en Sha iah-complian inancing will g ow. This end is pa o a b oade global
mo emen owa ds inancial inclusion, using digi al pla o ms o connec he unde banked wi h banking se ices.
2. Challenges
Despi e all o hese ad ancemen s, some obs acles con inue o cons ain he b oade accep ance o Sha i’ah-complian inancing
solu ions o Hajj and Um ah.
o F aud: Despi e e e y hing, cases o aud con inue o pose one o he mos se ious challenges in he pilg image unding
indus y—uncon olled inancial scams – pa icula ly hose ocused on poo pilg ims. Pilg ims ha e complained o being
misled by unsc upulous a el agencies and inancing companies, which o en dangle p o e bial ca o -and-s ick low-cos
