Managing Debt by Objective (MDBO): A Sharia-Compliant Framework for Sustainable Household Finance and Social Well-being in Emerging Muslim Economies, Emad El Sahhar

Emad El Sahhar
Cairo University
Egypt

Abstract: The rapid growth of household debt across emerging Muslim economies presents one of the most under-addressed sustainability challenges of the twenty-first century. In the Gulf Cooperation Council (GCC), individual borrowing has exceeded one trillion Saudi riyals, representing nearly 44% of total bank lending, with over 60% of new employees becoming indebted within the first three years of employment. Despite stable inflation, this escalating dependence on personal credit especially among young professionals has begun to threaten social stability, mental wellbeing, and long-term economic resilience. The paper introduces Managing Debt by Objective (MDBO) an integrated, Sharia-compliant framework that aligns personal financial accountability with institutional performance management (MBO system) and national vision & sustainability agendas. Rooted in Maqasid al-Shariah, MDBO protects faith, wealth, intellect, and social stability by embedding ethical debt behavior into employees’ measurable objectives. The model links financial wellness with Key Performance Indicators (KPIs), enabling employers to assess and reward responsible financial conduct. By integrating the principles of Fiqh al-Muʿāmalāt, ESG criteria, and national development priorities such as Saudi Vision 2030 and UAE Vision 2031, MDBO transforms debt management into a catalyst for social justice, productivity, and economic sustainability. The proposed pilot program in Sharjah, UAE, demonstrates how MDBO can reduce household indebtedness, improve savings rates, and enhance wellbeing through employer–bank–government collaboration. The paper concludes by proposing MDBO as a policy innovation capable of guiding the post-Agenda 2030 transition toward a more balanced, ethical, and inclusive global financial ecosystem one where economic growth and spiritual integrity reinforce one another.
Keywords: Maqasid al-Shariah, Household Debt, Islamic Finance, Financial Literacy, Sustainable Development, ESG, GCC Vision 2030.