In 2001, a group of friends, at the Lahore Gymkhana, came up with a revolutionary idea: an organisation that could help people out of poverty through interest-free micro-loans. These friends were critical of standard microfinance programmes, that claimed to assist the poor but charged exorbitant interest rates, trapping borrowers into never-ending repayment plans.
Initiating a successful interest-free microfinance programme had never been done before in Pakistan. No one knew exactly how it would work, but one of the friends pledged 10,000 Pakistani rupees to start it off. Another friend, Dr Amjad Saqib, decided to put the donation to use by lending it out as an interest-free loan. This is how Akhuwat was born.
Akhuwat gave its first loan of 10,000 Rupees (approximately AU$ 40) to a widow who was striving to earn a living through honourable means. She wasn’t looking for charity; she only wanted a helping hand. The money helped her boost her small business and increase her income. Whereas before her family could only afford to eat one meal a day, now she could feed her children two meals. The widow repaid her loan within six months. She reinforced our belief that when we help the poor with trust and respect, they exhibit unshakable integrity.
The success of Akhuwat’s first loan brought in more donations. And that group of friends became convinced that their venture into interest-free microfinance was viable. They were to become Akhuwat’s first Board of Governors, and Dr. Amjad Saqib became our first Executive Director.
Akhuwat marked the beginning of a new chapter in microfinance. One that found its inspiration not only in economic viability, but in the Islamic spirit of compassion and generosity.
Akhuwat officially began operations on the 26th of March 2001. In early April, of the same year, two more loans of 10,000 Pakistani Rupees were given out. From then on, we’ve seen the ever growing success of our Islamic Microfinance programme through the lives we’ve helped to improve.
We’ve provided a staggering five million loans, since our inception, totalling 155 billion Pakistani Rupees. To date we’ve enjoyed a total loan recovery of 99%. This is the highest loan return rate in the world!
At Akhuwat, Islamic microfinance is our core programme. But to tackle poverty on all fronts, we also run other development programmes. These include:
