Alhuda cibe - Akhuwat interest free microfinance

1. Religiosity and threshold effect in social and financial performance of
microfinance institutions
Mohammad Ashraful Mobin

2. Akhuwat Interest Free Microfinance
A Journey of Hope
Junaid Farid
Director, Strategic Planning & International Marketing

3. An attempt to resolve poverty and social
development issues through innovation
Akhuwat

4. History
• Akhuwat was established in 2001 with the objective of
providing interest free micro-credit to the poor so as to
start a business, come out of poverty and enhance their
standard of living. Subsequently it added education, health,
clothing and some other services in its mandate
• ‘Akhuwat’ means solidarity with the poor and less
advantaged.

5. Vision
A poverty free society built on the principles of compassion
and equity.
Mission
To alleviate poverty by empowering socially and
economically marginalized families through interest free
microfinance, quality education, better health-harnessing
entrepreneurial potential and building capacity by
imparting knowledge, skills and social guidance.
Akhuwat

6. Objectives
• To provide interest free microfinance services to poor
families enabling them to become self-reliant
• To promote interest-free loans (Qarz-e-Hasna) as a
viable model and a broad-based solution for poverty
alleviation
• To provide social guidance, capacity building and
entrepreneurial training

7. Objectives
• To institutionalize the spirit of brotherhood,
compassion, and volunteerism
• To transform Akhuwat borrowers into donors
• To make Akhuwat a sustainable, growth-oriented
and replicable organization

8. Core Principles
• Interest-free loans – Qard e Hasan
• Use of Religious places like mosque & church
• Spirit of Volunteerism
• Transforming Borrowers into Donors

9. Products
• Enterprise Loan
• Liberations Loan
• Agricultural Loan
• Education Loan
• Marriage Loan
• Emergency Loan
• Housing Loan
• Establishment of School Loan

10. Range of Loans

11. Usage of Loan

19. Map of Pakistan

27. Cost structure of Loans
Loan Structure
• Interest on Loan = 0
• Loan Processing fee = 0
• Profit on Loan = 0
• Application Fee = $2
• Insurance = 1%

28. Performance Overview
• Started in 2001 with 100 USD
• Credit pool has now grown to USD 90 Million
• The credit pool is a revolving fund
• The amount is regularly disbursed and
recovered
• Cumulative disbursement is USD 300 Million

29. Performance Overview
• Total Benefiting Families = 1.6 Million
• Total Amount Disbursed = USD 300 Million
• Active Loans = 600,000+
• Number of branches = 508
• Number of cities & towns = 300
• Number of staff = 3000+
• Recovery Rate = 99.8%

30. Progress Overview

31. Progress Overview
192 282 832 3,124 6,264 8,674 11,388 13,821 21,073
34,194
67,683
159,138
234,883
367,798
496,458
0
100000
200000
300000
400000
500000
600000
No of Loans

32. Progress Overview
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
No. of Branches 1 2 4 7 11 18 20 22 36 77 153 254 289 356 508
No. of Staff 3 3 12 32 50 75 76 90 181 358 505 858 1600 2007 2964
1 2 4 7 11 18 20 22 36 77
153
254 289
356
508
3 3 12 32 50 75 76 90
181
358
505
858
1600
2007
2964
0
500
1000
1500
2000
2500
3000
3500
GROWTH
No. of Branches No. of Staff

33. Progress Overview
10.34
6.41 6.8 6.38
7.61
9.54
13.36 12.82 13.25
18.3
15.49
12.68
15.11
9.79
14.2
0
2
4
6
8
10
12
14
16
18
20
% of Cost per Loan

34. Progress Overview

35. Repeat Loan Analysis

36. Replication

37. How to replicate
• Introduction of Akhuwat model
• Website and promotional material
• Training manuals and operational material
• Staff training
• Visit Akhuwat premises
• Continuous technical support

38. Issues in Replication
• Strong Commitment
• Financial Resources
• Operating at optimum level
• Simplicity and keeping costs low
• Local conditions
• Human Resource

39. Akhuwat Projects
• Akhuwat Institute of Social Enterprise & Management
• Akhuwat University
• Akhuwat College
• Akhuwat Schools
• Akhuwat Health Services
• Akhuwat Cloth Bank
• Akhuwat Make a Dream
• Khwajasira Rehabilitation Program

40. OUR BELEIEF
• Poverty alleviation is the joint responsibility of the
state and the civil society
• Equitable distribution of wealth is a pre-requisite
• Charity alone is not the answer
• Solidarity with the poor is the way forward
• Availability of credit/financial inclusion is a must for all
• We derive our inspiration from Islam but our message is
universal for all

41. Discussion
Question and Answer Session

42. AlHuda CIBE FZ LLE - U.A.E
P: + 971 56 9286664, + 971 55 938 99 00
AlHuda Center of Islamic Banking & Economics - Pakistan
Ph: (92-42) 35913096 - 98, Fax: (92-42) 35913056
Email: info@alhudacibe.com Website: www.alhudacibe.com