Akhuwat Micro Credit Success Story

When Shamim Akhtar’s twenty year old daughter developed an acute case of ulcer in 2017 and had to be hospitalized, her husband was unemployed. She had little choice but to approach a neighborhood moneylender and borrow Rs.20,000/- at a 200 percent interest rate which equated to a payment of Rs.2,000 to the moneylender every month. In eighteen months, she had already paid Rs.36,000 in interest and still owed the principal amount of Rs. 20,000. A couple of months ago she heard of Akhuwat, a Lahore – based non-profit organization that gives out interest free loans to the poor, and even settles any existing outstanding amounts in the form of “liberation loans”.

Now Akhtar is one of 400 people, mainly women, which Akhuwat has liberated from the clutches of loan sharks. “One of their managers came with me to the money lender and paid him off in one go. I’ve never felt so relieved”, she says, “I now pay them Rs. 1,000 every month and will be able to clear my loans in twenty months”.

“We really target the poorest of the poor, the ones who cannot access microcredit”, says Dr Amjad Saqib, Executive Director of Akhuwat. So where does Akhuwat raise its funds from? “From all over the world”, says Dr Saqib with pride. “We’ve really never had to worry about getting the money, it just comes”, says Saqib. He explained further “Anyone can become a life member by donating a sum of Rs.10,000. This amount is credited for one year, returned to the credit pool and lent again, and the donor this way saves many families from the abject poverty by just this initial amount”.

He is convinced that Akhuwat’s philosophy is a solution to poverty alleviation. Most microfinance institutions (MFIs) charge at least 20 per cent interest, which necessarily excludes the ‘dirt poor’. “Ours is an indigenous model a blend of volunteerism and necessary compensation…all one needs is the will to help the poor”, he stresses. All Akhuwat branches function within the premises of religious places. According to Saqib, the decision was deliberate. “For far too long we limited the use of mosques to just prayers. In between, they are desolate. With our offices in mosques we have saved tremendously on operational costs. We don’t pay rent or utility bills”, he explains. While Pakistan’s mosques are mainly male spaces, half of the organizations beneficiaries are women, and quite a few of them non-muslims who face no discrimination. “Our only criterion is they should be poor”, says Saqib.

Thanks to two loans from Akhuwat, Ayub Masih, a Christian wage earner, now has a vegetable cart. Very soon, he plans to apply for a bigger loan of Rs. 20,000 to start a PCO, a public phone booth. “The fights at home had stopped”, he says cheerfully, while admitting, “I was a bit reluctant to visit a mosque, although I’ve been coming to the shrine of Shah Jamal (Sufi saint revered by people of all religions) since I was a child”. Liaquat Ali, a young tailor, believes the loans from Akhuwat are lucky. “It has helped me get back on my feet and feed my children…brought me luck as my business has prospered. It has to do with the holiness of the place”, he asserts. Previously working on his own, he tailored only one shalwaar kameez (A traditional dress of Sub-Continent) a day. Now, with two helpers and two more machines he makes eight to nine sets daily.

In addition, Akhuwat gives alternate livelihood to sex workers – the first initiative of its kind in Pakistan. In Lahore’s famous red light district, 25 women, either old or physically unfit, have been provided money to set up small kiosks that sell various on-the-go items. The women are identified by ‘Sheed’, an NGO that helps sex workers. ”This is one of the poorest areas of Lahore with dismal social and economic indicators and where women’s rights are completely trampled”, explains Lubna Tayyab, general secretary of Sheed.

Indeed, Akhuwat’s spirit of brotherhood is all encompassing.


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