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.