Desperate Indonesians Take Hajj Loans, Chased by Loan Sharks

Jakarta, CNBC Indonesia - Hajj is one of the five pillars of Islam that must be fulfilled by financially capable Muslims. This capability encompasses not just physical and spiritual readiness, but also financial means, as the journey to the Holy Land and the extended rituals require substantial costs.

In Indonesia, Hajj holds a special place. Beyond fulfilling religious obligations, the status of having completed Hajj is often viewed as a social prestige symbol. Unsurprisingly, public interest in undertaking the pilgrimage remains consistently high.

This phenomenon is not new. Centuries ago, many Indonesians resorted to various means, including borrowing from loan sharks, to afford Hajj.

“Taking loans for Hajj was common in the past,” noted historian Henry Chambert-Loir in his 2013 work ‘Hajj in Bygone Days’.

During the Dutch colonial era, Hajj travel costs were significantly higher than today. Pilgrims travelled by sea, not air, taking one to two months each way to the Holy Land.

The lengthy journey inflated expenses. Aspiring pilgrims had to cover ship fares, living costs during transit, expenses in Mecca, and return travel.

Serang and Jakarta Regent Achmad Djajadiningrat, in his memoir ‘Herinneringen van Pangeran Aria Achmad Djajadiningrat’ (1936), stated Hajj costs in the early 1900s ranged between 500 and 800 guilders.

“That sum was his own, but he also needed to provide for his family left behind during his absence,” Djajadiningrat wrote.

At the time, gold was priced at around 2 guilders per gram, making 500 guilders equivalent to 250 grams of gold. With current gold prices nearing Rp1.8 million per gram, this amounts to approximately Rp434 million. In other words, Hajj costs in the early 20th century were equivalent to hundreds of millions of rupiah in today’s value.

For aristocrats, major merchants, and landowners, such costs may not have been an issue. However, for ordinary citizens, particularly farmers and the economically disadvantaged, meeting these expenses from daily income was difficult.

Consequently, many aspiring pilgrims turned to loan sharks, often using land or rice fields as collateral to secure funds for their journey.

The consequences were not always positive. According to Dutch archives cited by Chambert-Loir, 30% of Indonesian Hajj pilgrims in 1876 were left homeless in Saudi Arabia due to insufficient provisions, among those who had borrowed for their journey.

Problems typically arose upon their return home. Many Hajj pilgrims lacked funds to repay their loans, despite being obligated to settle their debts.

In such situations, they faced two equally harsh choices: surrendering collateral like land or rice fields to the loan sharks, or being forced into labour for the lenders until the debt was cleared. Both options were distressing, leading to relentless pursuit by loan sharks and suffering. Yet, they had no choice but to pick one.

Although borrowing was common, not all lower-class individuals resorted to this. In the same memoir, Djajadiningrat noted some pilgrims chose to sell land, farms, jewellery, or livestock to fund their journey to Mecca.