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International Journal of Islamic Economics and Business Sustainability (IJIEBS)

Financial and Social Maslahah Efficiency of BPKH in Managing

Abstract

Purpose – This study assesses the financial and social (maslahah) efficiency of Indonesia’s Hajj Fund Management Agency (BPKH) over 2018–2024, examining how effectively pilgrimage funds generate returns and public-benefit distributions consistent with Islamic finance principles and BPKH’s mandate.

Design/methodology/approach – An input-oriented Data Envelopment Analysis (DEA) model under Variable Returns to Scale (VRS) evaluates the transformation of inputs—total managed funds and operational expenditures—into outputs: investment income, benefit disbursements to pilgrims, and allocations to social welfare programs. Data come from BPKH audited annual reports (2018–2024). Robustness is assessed using Bootstrap DEA and Stochastic Frontier Analysis (SFA) to test stability and cross-method consistency.

Findings – BPKH reaches full technical efficiency under the VRS specification in most years, indicating strong managerial capability. Decreasing returns to scale appear during 2022–2024, implying that added inputs are not matched by proportional output gains and pointing to diminishing marginal productivity. Financial efficiency remains high overall, with a temporary decline in 2020, while social efficiency is more volatile, dropping below optimal levels in 2022. Bootstrap DEA and SFA support statistically robust scores, limited input redundancy, and broadly consistent parametric and nonparametric results.

Implications – The results suggest optimizing operational scale, institutionalizing performance-based budgeting with measurable outcomes, strengthening the linkage between investment performance and maslahah delivery, and diversifying sharia-compliant instruments while preserving Islamic ethical standards.

Originality/value – This is the first DEA-based evaluation of Indonesia’s Hajj fund management, offering a replicable, data-driven framework to assess dual financial–maslahah performance in state-managed pilgrimage funds, and informing governance reforms for similar funds.

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