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Akhuwat AN INNOVATIVE APPROACH TO MICROFINANCE by Dr. Muhammad Amjad Saqib 08-12-12 dubai. Inspiration : Muakhat -a-Madina Assumptions: People who want to give to others Poor are trust worthy and want to work 3 . Principles: Interest Free Mosque Local philanthropy & Volunteerism
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Akhuwat AN INNOVATIVE APPROACHTO MICROFINANCEbyDr. Muhammad Amjad Saqib08-12-12dubai
Inspiration : Muakhat-a-Madina Assumptions: People who want to give to others Poor are trust worthy and want to work 3. Principles: Interest Free Mosque Local philanthropy & Volunteerism Takers will become givers Introduction
Cardinal Islamic Practice Emphasis in Hadith and Practiced by Holy Prophet Higher virtue than Sadaqat/ Khairat 1. Interest free loan or Qarz-e-hasna Helping someone in need with interest free loans; these are preferred over charity.
Akhuwat has not reinvented wheel……… It has only institutionalized the individual practice of Qarz-e-Hasna
Cost Structure Interest : zero Loan Processing Fee: zero Profit : zero Application Fee : Rs. 100 Interest Free Loans (Qarz-e-hasna)
2. Use of mosque/church for social development • Akhuwat uses local mosque or church infrastructure as the center for loan disbursement. This provides an avenue for: • Community participation • Raising awareness • Cuts organizational costs • Ensures transparency and • Accountability.
3. Family loans Akhuwat does not discriminate on the basis of Male or Female. It visualizes family as a basic unit in a society. The loan application is jointly signed by male and female heads of the family.
4. Local philanthropy….. • Since its inception, Akhuwat has relied upon local philanthropists. Akhuwat’s source of funding is: • Individual donors • Institutional donors • Borrowers become donors
Local philanthropy • Helping our poor is our responsibility. • A pool of more than 1000 donors. • Donated amount ranges from PKR 10,000 to 10 million. • Donation Pool has exceeded Rs. 500 million • Developing working relations with International Donors
5. Volunteerism…. • The spirit of volunteerism is the hallmark of Akhuwat’s operations. It is a key factor for the success and sustainability. Many people extend their valuable time, money and other resources free of cost. • More than 1000 registered volunteers • Involvement of Civil Society, Private Sector, Expatriates & Experts • Universities: UCP, UMT & LUMS
Akhuwat volunteers with Ex-Governor Punjab Lt. Gen (rtd) Khalid Maqbool at a Certificate distribution event
…It is civil society at best A Fund Raising Event
Volunteerism is replication of Mua’khat-a-Madina
6. BORROWERS BECOMING DONORS • Our borrowers are our donors as well • Small Donation boxes are placed at work places • Borrower contributes Rs. 2 to Rs. 5 daily. • More than 50,000 active borrowers • It is not compulsory • Staff also donates • Journey towards Sustainability
MDP – journey towards sustainabilityDonations by borrowers 2011-12
7. Credit plus approach Akhuwat has used credit plus approach by introducing the idea of social guidance for its credit beneficiaries to help them flourish their small enterprises and improve their standard of living. It focuses on Education, Health, Environment, Local Laws and ethical business practices
8. Simple operations • Branch Offices in Mosque • “Farshi” Floor Seating • Training in Mosque • No Car/ Jeep • Banker on bike • No Tea/ eatables