By the grace of Allah, We are the World’s Largest Islamic Microfinance Organization.
Akhuwat aims to alleviate poverty by creating a bond of solidarity between the affluent and the marginalized. Our goal is to develop and sustain a social system based on mutual support. We extend a helping hand to the poverty-stricken by providing interest-free loans so they can start a business and become self-reliable.
We are a non-profit company, established in 2001, and registered with the Securities & Exchange Commission of Pakistan under section 42.
We see Akhuwat not only as a religious obligation, but also as a social contract – it is a pact between the privileged and the underprivileged, a duty of those who have resources towards those who do not. Today, Akhuwat’s operations reflect strengthening of its original philosophy, coupled with surprising new initiatives.
Akhuwat – literal translation ‘brotherhood’ or solidarity derives its name from the Islamic concept of ‘mua-khaat’. The term was coined in 622 A.D. when immigrants from Mecca fled persecution at the time of migration by Prophet Muhammad (PBUH). Mua-khaat was the result of the citizens of Medina sharing their wealth and establishing a bond of brotherhood with the migrants of Mecca.
Akhuwat provides interest free loans to the economically poor so that they may acquire a sustainable livelihood. The organization sees interest as a barrier to widespread proliferation of capital, and a violation of all moral and ethical codes. In keeping with the principles of equity and social justice, burdening the poor with exorbitant interest rates is also viewed as undermining the overarching goal of poverty alleviation.
Use of Religious Places
Use of Religious Places
The Akhuwat Model institutionalizes the use of local religious places, for example mosque, temples and churches, as centers for loan disbursements and avenues for community participation. Using the existing indigenous infrastructure for operations allows us to minimize our expenditure, have a higher level of transparency and accountability, and create a sense of goodwill amongst the community.
Transforming Borrowers into Donors
Borrowers into Donors
Originally not a part of Akhuwat’s programs, the MDP (Member Donor Program) was introduced when a successful borrower asked for ways in which to contribute to the organization that was responsible for his uplift. His spirit and tenacity struck the staff of Akhuwat as an exemplary realization of the culture which it had been trying to promote. After all, the greatest indication of poverty reduction in a society is the transformation of borrowers to donors. The board immediately decided to set a fund that borrowers could contribute to, with the instruction that it’s not compulsory.
Spirit of Volunteerism
Spirit of Volunteerism
We see Akhuwat as a social contract — it is a pact between the privileged and the underprivileged, a duty of those who have resources towards those who do not. With that in mind, the organization trains and employs volunteers on a regular basis. We believe that an ideal social enterprise employs a mixture of volunteerism and necessary compensation; we preach the same principle to our employees and encourage them to contribute to this brotherhood beyond what is dictated by their formal contract, and thus the cause of Akhuwat becomes each employee’s own.
Working as GM at the Punjab Rural Support Program (PRSP) in 2001, Dr. Amjad Saqib found the 20 percent interest charged on the loans disturbing. One reason was that the policy was in direct conflict with the teachings of Islam. The other was that in the formal banking sector the interest was much lower and available to ‘creditworthy’ affluent individuals, only.
Inspired to make a change, Dr. Saqib wanted to start a Microfinance program where the loans were in the form of Qarz-e-Hasna and the benevolent loans. He took his big idea to a small gathering of friends and won over their support. With an initial donation of a humble 10,000 rupees from Mr. Saleem Ranjha and the undying support of Dr. Kamran Shams, Dr. Izhar Ul Haq and Mr. Humayon Ehsan, Akhuwat was formed. The first loan was given out to a woman.
For its initial years, Akhuwat was simply a philanthropic venture to see how interest free microfinance would do. However, by 2003, the donations had increased to a whopping Rs. 1.5 Million and the loan recovery rate was 100 percent. Consequently, it was decided to initiate Akhuwat as a proper and registered organization under the Societies Registration Act of 1860.
From 2001 to 2003, Akhuwat had managed to receive donations at an exceptional scale. The work that was once handled by Dr. Saqib himself and one another employee was delegated. These two years became the “action research”, laying the foundation of a great movement and an unmatchable institution to date. The investments made by the small team eventually lead to the establishment of Akhuwat’s first branch in Township, Lahore. The same branch now serves as the Head Office.
Board Of Directors
Akhuwat is governed by a board of directors; consisting of philanthropists, civil servants and businessmen.
Dr. Amjad Saqib, a renowned social worker and development expert is the Executive Director of Akhuwat. The Board members have worked purely out of benevolence and the goodness of their hearts with no financial interests in their investments. The Head Office manages and organizes different activities and projects in-house.
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