Holy Loans! Bank financing for Hajj amid skyrocketing costs stirs controversy

Aya Salah , Tuesday 30 May 2023

Hajj costs have skyrocketed by more than 85 percent in the past year. This enticed a number of Egyptian banks to offer loans to those seeking to perform the religious duty. Enter controversy.

Hajj
File Photo: Muslim worshippers gather before the Kaaba at the Grand Mosque in Saudi Arabia s holy city of Mecca on July 1, 2022. AFP

 

In 2022, Hajj costs ranged between EGP 94,500 per person for the at-cost pilgrimmage trip and up to EGP 193,500 per person for commercial prices.

This year, Hajj costs have doubled on average from EGP 175,500 to EGP 310,000 ($5,600 to $10,000) per person.

Moreover, luxury Hajj deals exceeded EGP 1.5 million ($48,000) per person. 

This year, Egypt is assigned a quota of 35,000 pilgrims under the Saudi allocation system of numbers of pilgrims allowed per country.

The Hajj pilgrimage is one of the five pillars of Islam and is obligatory once-in-a lifetime for able-bodied Muslims who can afford it.

However, many Egyptians who were well-off enough to perform the obligatory religious pillar in past years find themselves unable to do so now due to soaring costs. 

Enter the banks

Banque Misr offers a Hajj loan of up to EGP 400,000 ($12,900) per person and an Ummrah (lesser pilgrimage) loan of up to EGP 100,000 ($3,000) per person, with competitive returns. 

The bank also provides a free life insurance policy for the duration of the loan, but applicants must be 21-years-old or older. 

United Bank offers Hajj loans without a maximum limit or returns, with the loan amount depending on the client's ability to repay and monthly income. The loan period is one year for all citizens who are over 21-years-old.

Meanwhile, Faisal Islamic Bank offers Hajj loans with a maximum amount of EGP 500,000 ($16,100) for pilgrims to be paid back over a five-year period.

AlBaraka Bank's Hajj loan covers up to 50 percent of the total cost of the Hajj, with a repayment period of one year for those who have a minimum monthly income of EGP 3,000. 

Controversy

The idea that people would have to resort to taking a loan from a bank to perform the fifth pillar of Islam has sparked a controversy among the public. 

“Is not the Hajj only obligatory on those who can afford it? Why would you take a loan to go?” one Twitter user asked. 

Another user asked “Why do people burden themselves with what they cannot bear?” 

“If you do not have the money to perform Hajj, then do not do it and do not put yourself in a difficult situation,” she added. 

This last user concluded by citing a passage from the Quran that says, "Allah does not require of any soul more than what it can afford." (Quran 2:286)

 

"A Hajj with a 16 percent interest rate loan? Why do people burden themselves with what they cannot afford? Allah does not ask you to do except what you can shoulder!" said another Twitter user.

Clerical opinion

Dar Al Iftaa, the official body responsible for issuing religious edicts, weighed in on the issue.

Khaled Omran, the secretary of Dar Al Iftaa, said Muslims who would have to borrow money for Hajj are not obliged to perform it. 

“Hajj is an obligation only for those who are physically and financially capable of performing it,” the official said in a phone interview with the Ala Mas'ouliti programme on Sada Balad TV.

Hajj, actually

Each year, millions of Muslims from around the globe perform the Hajj in the Holy City of Mecca during the 12th month of the Islamic Calendar Dhul Hijjah.

The Hajj pilgrimage is performed over five to six days.

When the new crescent moon is sighted, Eid al-Adha, the largest religious holiday of the year for Muslims begins, which lasts for four days.

The pilgrimage is comprised of a series of rites and rituals, some of which must be performed in order.

This year, Hajj starts on 27 June according to the Gregorian Calendar.

It's the pound!


Speaking to Ahram Online, Nasser Torky, a member of the Supreme Committee for Hajj and Umrah, attributed the increase in the costs of Hajj this year to the devaluation the Egyptian pound in 2022 and the ensuant steep rise in airfares.

The dollar now trades at nearly EGP 31 compared to EGP 15.75  at the start of Ukraine conflict in the spring of 2022.

Th Saudi Riyal now trades for EGP 8.17 compared to EGP 4.18 at the start of the conflict.

“The annual increase in the price of housing and other services in the Hajj season in Saudi Arabia also contributed to the overall increase in pilgrimmage costs,” Torky said.

Egypt was assigned a quota of 70,000 pilgrims in this Hajj season but opted to use only 50 percent of this quota due to the shortage of hard currency in the country, he added.

Three roads to Mecca


The government organizes Hajj trips according to a three-pronged system.

First, the Ministry of Interior runs a lottery system for at-cost Hajj trips, which is open to all citizens to enter.

This year's total cost under this option, including a plane ticket, has risen to EGP 175,500 ($5,600) per person up from EGP 94,500 ($3,050) per person last year.

Second, the Ministry of Tourism and Antiquities runs a regulated lottery system at various commercial prices.

These options witnessed a surge in prices as well.

Prices for lower end deals under this option, which include a trip by boat then bus rather than plane, reached EGP 130,000 ($4,200) per person.

Higher end deals, which include accommodation in first-class hotels have increased from EGP 173,500 ($5,600) per person to EGP 275,000 ($8,900) per person , not including a plane ticket.

The cost for those wishing to stay in hotels only 250 metres from the Grand Mosque in Mecca has increased from EGP 193,500 ($6,240) to EGP 310,000 ($10,000) per person, without a plane ticket.

First class Hajj

Finally, private tourism agencies offer commercial Hajj deals at various affordability levels to those who can pay.

The cost of these can exceed EGP 1.5 million ($48,500) per person as they offer higher levels of services in terms of air travel, accommodations and transportation.

“We offer three programmes which range from EGP 1.4 million to EGP 1.6 million per pilgrim based on the type of flight ticket, accommodation and duration of stay,” a representative from a tourism company that offer luxury Hajj deals told Ahram Online.

One of those deals includes an economy flight with a 10-day stay - split between Mecca and Medina.

The total price per person is EGP 1.55 million for a double room and EGP 1.5 million for a triple room.

Pilgrims who wish to use the deal can pay 50 percent of the booking amount upfront and can pay the remaining balance after acquiring the Hajj visa, the representaive added.

A dream deferred

Many prospective pilgrims have chosen not to make the journey this year as prices soared.

“I was selected in the Hajj lottery this year but the ask costs exceeded my budget and, therefore, I was not able to go through with the process,” Sahar Abdullah, a widowed mother, told Ahram Online. 

Other Egyptians expressed disappointment and despair that the high costs are preventing them from realizing the dream of performing Hajj. 

“The prices of Hajj are turning pilgrimage into a distant dream that becomes increasingly unattainable with each passing year,” a Twitter user lamented. 

 

“This is the house of God. It is supposed to be open to everyone - both the poor and the rich,” a Facebook user said in a comment on a post about Hajj programme prices. 

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