Financial sustainability challenges of Hajj Financial Management Agency (BPKH): What really matters?

Dony Perdana, Saeed Awadh Bin-Nashwan, Aishath Muneeza and M. Kabir Hassan

Chapter 11 in Islamic Finance in Eurasia, 2024, pp 222-251 from Edward Elgar Publishing

Abstract: This chapter aims to evaluate the Hajj financial management system by Hajj Financial Management Agency (BPKH) with challenges that have the potential to impact the financial sustainability of Hajj funds; assesses the effectiveness of the implementation of the Hajj fund subsidy system associated with the financial sustainability of the Hajj fund; and proposes solutions to overcome the Hajj financial management system and Hajj fund subsidy systemHajj fundssubsidy system. A qualitative research approach through interviews along with a documents review was used to collect data and achieve the research objectives. The results of the analysis show that there are challenges in the Hajj fund management system in terms of regulation, which are the issuance of Law Number 8 of 2019, about the Management of Hajj and Umrah that regulates different things for the same substance in Law Number 34 of 2014 about Hajj Financial Management. This resulted in the unclear relationship and flow of Hajj financial management related to the implementation of the Hajj pilgrimage between two related institutions, which are the Ministry of Religion and the BPKH. In addition, regarding the financial sustainability of the Hajj in the practice of providing subsidies for the implementation of the Hajj, it can be stopped gradually. If the subsidy system is to be continued, it will make Hajj finances unsustainable and not in accordance with sharia principles and justice. This study is the first of its kind to examine the financial sustainability of the Hajj Financial Management Agency (BPKH) in Indonesia. In addition to being a reference for future researchers, this study could also serve as an impetus for policymakers to design strategies that overcome the weaknesses of the Hajj financial management system and the Hajj fund subsidy systemHajj fundssubsidy system.

Keywords: Asian Studies; Business and Management; Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2024
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