That is the business of Akhuwat, and in the process it has given microfinance a whole new dimension, an entirely different meaning
He is the progenitor of the idea of interest-free microfinance as well as the driving force behind Akhuwat. It is a tribute to Dr. Amjad Saqib’s dynamism and also that of its board of directors that in just about 12 years, Akhuwat has from a fledgling that started off with negligible seed money has become an organization with a national footprint – with presence in all the four provinces, Azad Kashmir and Gilgit-Baltistan. It is already collaborating with the governments of Punjab and Gilgit-Baltistan, both having channeled their poverty alleviation programmes through Akhuwat to the tune of Rs2 billion and Rs200 million. Apart from this most credible recognition, ‘Lend with Care’, an international NGO with presence in 80 countries across four continents, is now also directing substantive funding toward Akhuwat in a significant manner.
Akhuwat has grown big and the momentum it has generated in the last few years is reflective of it being embraced by an ever-broader base of donors. That it doubled all its key indicators in 2013 year-on-year is another measure of the organization having become a vital force in alleviating poverty.
The figures are impressive, indeed. From a few thousand rupees to an organization dealing with cumulative asset base of Rs 7 billion, from being too poor to buy furniture as a startup venture in a non-descript shanty, now having a sprawling seven-storey headquarter in Lahore. Then it had to per force seat its people on the floor. Now having grown to 256 offices in 143 cities, on average disbursing a loan every three minutes, having reached 400,000 families and counting, it still operates from the floor. This is deliberate: one, to keep operational costs low in order to make every donated rupee go farther; two, to empathize with its borrowers who are essentially the poorest of the poor, and, three, to remain embedded with tradition.
The way it has been institutionalized, one can safely predict that this is going to grow bigger and bigger. I would want to see Akhuwat one day, hopefully not too far in the future, being acknowledged as an organization that contributed majorly in alleviating poverty from this country.
But even more impressive than the figures is the philosophy that draws on the innate human goodness, providing it a vehicle to share one’s well-being with the less fortunate with the intent to lift them out of poverty – for good.
Akhuwat is also an organization of amazing contrasts. It draws its spirit and its moral moorings from Mawakhat-e-Medina, yet religion plays no part in its consideration when financing a project. And while it holds its loan disbursement functions at mosques and shrines, again irrespective of the religious belief of the borrower, for the same purpose it also goes to churches and temples without the slightest inhibition. The message is loud and clear: Humanity is foremost, and, again the concept flows from one of Prophet Mohammad’s (PBUH) sobriquets, Rehmatul lil alameen(Blessing for all).
Here is how Dr Amjad Saqib describes the entire venture, how it was conceived, what he and his comrades have gone through in the last one dozen years of building Akhuwat into a force to reckon with. Excerpts from an interview:
Q: Were you not daunted by the fact that interest-free microfinance was not practiced anywhere on this planet, at least not on a mentionable scale, when you conceived of Akhuwat?
A: Well, I knew it was not going to be a cakewalk. But before I answer the question, let me narrate you a real-life incident. Once I had this occasion to introduce Akhuwat, then in its early days, in what was a very brief interaction in the middle of a reception to one of our former prime ministers. When I told him that Akhuwat lends on ‘No Interest’, he quipped, words to the effect: “How can you remain solvent?” As he moved on, I wondered about the futility of convincing a banker to forego interest! How could he have appreciated that inherent in ‘interest’ is business, a transaction which is always more beneficial to the lender than the borrower. And this is anathema to Akhuwat, the antithesis to our core belief.
The basic premise, the assumption on which we commenced this rather eventful journey in March 2001 was that there were people who wanted to share their well-being with others who weren’t as fortunate as them. From the word go, this was not to be a charity, though it was funded out of donations. We lend with the intent to turn the borrower into an entrepreneur, but along the way our staff is trained to interact with the person and the core group in a manner that he or she becomes a part of the Akhuwat family and subsequently a donor. Herein lies the sustainability of the organization, the more people it pulls out of poverty, the more donors it has – on top of those who donate to support the programme.
But to answer your question, No, I and my friends were by no means daunted by the concept. We knew that it would be difficult to bring people round to the idea of interest-free microcredit but we also were confident that once we had a few success stories behind us, the organization would draw strength from it and grow.
Q: You make it sound so simple… What are your considerations while evaluating a borrower?
A: Well, the idea is simple, the execution has its own complexities but we have overcome those with the assistance of our staff and volunteers. Everybody whose life is touched by Akhuwat becomes a part of it and starts owning it. That is the beauty of Akhuwat, the selflessness, the spirit and sense of sharing and sacrifice it cultivates gets people hooked to it for good.
Everybody whose life is touched by Akhuwat becomes a part of it and starts owning it. That is the beauty of Akhuwat, the selflessness, the spirit and sense of sharing and sacrifice it cultivates gets people hooked to it for good.
As for our evaluation process, we lend smart, with care, after due diligence. Where we feel that the borrower is not ready, we arrange for on the job training prior to lending etc. The proof of the excellence of our system is Alhamdolillah 99.8 per cent recovery rate.
Q: But you must be aware that microfinance has become a huge business in itself, sucking up world’s surplus cash and parking it in a sector that yields high profits?
A: Yes, it is ironical, and it is a global phenomenon. Yields in microfinance are higher than traditional finance now because the lenders cover their risk and also take advantage of the desperation of the borrower. I don’t want to sound critical of microfinance; the intent is definitely poverty alleviation, but the fact is that the costs are horrendous.
Q: What made you resign from the Civil Service of Pakistan, when you were in the prestigious DMG and on the verge of promotion to grade 19?
A: Well, certainly not out of any disrespect for the job. Actually once I had decided that my future was in the social development sector, I believed that I perhaps could contribute far more if I dedicated all my energy and attention to that than remaining tied to the civil service. Once that decision was made in my mind, it was not difficult to quit. However, let me make it clear that one can do a lot for the people remaining in civil service as well. And there have been and are too many shining examples of devotion to service in our bureaucracy, the sort that makes a real difference. But as I said, it was a personal decision, with the drive coming from within.
Q: Did you ever regret leaving the civil service?
A: Early on it was difficult to reconcile with, owing to financial as well as social issues, for once you’re out of the service one invariably goes a few notches down in the social pecking order. But regret I never did. My father and father-in-law both had been in civil service. Convincing them would have been a tad difficult. But I had made my decision to take the plunge, so I just confided in my spouse, and it was she who discouraged me from even discussing it with my father and father-in-law not because it may have weakened my resolve but created undue anxiety. Contrary to my wife, most of my well-meaning friends in the service had advised me to go on long leave and test the waters first, but personally I didn’t want to waver. I was much too focused on what I had to do, and the intent was such that I wanted to be up-front and in no way use underhand tactics to stay out and yet in the service at the same time.
It is ironical, and it is a global phenomenon. Yields in microfinance are higher than traditional finance now because the lenders cover their risk and also take advantage of the desperation of the borrower.
It is not without a hint of irony that, other than seeing Akhuwat grow, the two happiest days of my life were when I was selected [He had the distinction of standing first in the civil service written exam, and third overall] for the Civil Service of Pakistan and the day I left it for good.
Q: Who would you give credit for Akhuwat’s success and what to you is the reward?
A: Mima Taufiq Illullah, credit is to those who had the means but more importantly the impulse and the grace to do a good deed. My gratitude is for those who had faith in us, and who contributed, big and small is irrelevant, toward Akhuwat becoming what it has. Next the credit goes to nearly 450,000 people so far who borrowed from us, lifted themselves literally from their bootstraps to prove that our assumption about their being trustworthy was right. Then comes the Akhuwat staff and volunteers who made Akhuwat’s philosophy a way of life. As far the board members, most of them my friends, as that age-old Persian saying goes ‘Hisaab-e-dosta’n dar dil’, that debt of gratitude is between them and myself. And it shall remain there forever.
As for reward, the work and the sense of fulfillment that it has given me is a reward unto itself. What makes me most happy about the venture is that it has introduced me to so many who with a little prompting respond to our social obligations and moral and religious responsibilities.Jazakallah.
Q: A full one dozen years on, what sort of satisfaction does it give you? Where is Akhuwat headed to? Where would you want to see it?
A: It gives me immense satisfaction not just in the personal sense but also from the point of view of transforming lives, giving hope to people, if I may say, creating those little islands of hope that is the business of Akhuwat and the momentum, range and dimension that it has gathered, I would not want to swap it for anything in the world.
From what Akhuwat has become, which is no less than a movement now, and the way it has been institutionalized, one can safely predict that this is going to grow bigger and bigger. I would want to see Akhuwat one day, hopefully not too far in the future, being acknowledged as an organization that contributed majorly in alleviating poverty from this country.