(MENAFN - Arab News) Every Muslim country especially the populous ones such as Turkey, Iran, Indonesia, Pakistan, Bangladesh and Egypt should have one. But of the 56 member countries of the Islamic Development Bank (IDB), only one has and another is in the process of establishing one. The institution in question is a non-banking savings institution for would-be Haj pilgrims such as the one pioneered by Malaysia in the 1960s, Lembaga Tabung Haji (The Malaysian Pilgrims Management Fund) which today has assets in excess of RM10 billion with equity stakes in Islamic banks, plantations and technology companies.
Not surprisingly, the launching of a joint venture Kaz Haj in June 2011 by Fattah Finance, an Islamic asset management company in Kazakhstan, and Amanah Raya Berhad Group, Malaysia's state-owned trustee company, could be an important development which may just pave the way for other countries to follow suit. Kaz Haj, the promoters stress, is the first Islamic investment fund in the CIS country for Haj pilgrims, and will be a Kazakh version of the iconic Lembaga Tabung Haji, the most successful non-banking Islamic financial institution in the world.
The joint-venture agreement for Kaz Haj was signed in the presence of Malaysian Prime Minister Mohd Najib Razak during his visit to Astana, Kazakhstan in June 2011 where he also delivered the keynote address at the opening of the World Islamic Economic Forum (WIEF). Amanah Raya and Fattah Finance will initially invest about RM1.5 million in the fund which will allow would-be pilgrims to save up to perform the Haj in Makkah, Saudi Arabia, and which is one of the five pillars of Islam. Kaz Haj, like Tabung Haji, is effectively a mutual savings society where investors are members of the society and surplus savings are invested in a Shariah-compliant way.
What is curious is that it is Amanah Raya Berhad that is leading the initiative and not Tabung Haji, which in the past has proven to be conservative, complacent, parochial and bureaucratic. In the past Tabung Haji managers used to stress that it is not the job of the fund to export the idea of the institution. It is up to those who are interested to come and talk to us. The danger is that Amanah Raya may not be as experienced as Tabung Haji in launching a joint venture Haj fund.
Kazakhstan has a population of 16 million, of which 70 percent is Muslim. Some 4,000 Kazakhstanis perform the Haj every year. The promoters hope that Kaz Haj will encourage more Kazakh Muslims to go on Haj or Umrah.
According to Ahmad Rodzi Pawanteh, Amanah Raya Group managing director, the fund, which is co-managed by the two promoters, will invest in properties, equities and other Shariah-compliant investments mostly outside Kazakhstan. The promoters are targeting an average annual return of 6 percent to 8 percent over three years.
Amanah Raya also has plans to launch similar funds with local partners in Azerbaijan and in Tatarstan, the largely-Muslim republic in the Russian Federation.