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THE STORY
There was a poor widow who once came to bureaucrat seeking for financial
help. He could see the guilt and shame in her eyes at that moment. Rejected
by her friends and family, she was forced to beg.
He asked her “why do you need the money”
She replied “I want to buy a swing machine in order to earn my livelihood”
On that spot he had an idea , in order to maintain her dignity , he gave her a
loan of RS:10,000/- instead of charity with the promise to return the money
when ever she could afford to.
She returned the entire amount within six months and in this time period she
was able to marry her daughter and earn a decent living.
A family was saved from the clutches of poverty and a new journey had begun
which started from a wooden cabin and staff of two people has
extended to 256 branches in 136 cities and towns. The scholars
from Oxford to Harvard are astonished at the miracle of
Aukuwat. They are thinking how it is possible to run a micro
finance scheme on 0% interest rate. Yes, it has become possible.
A renowned professor of micro-finance, Malcolm Harper, comes
to Pakistan to see this miracle with his own eyes. About five
hundred scholars of the world gather at Harvard University and
listen to the successful story of Akhuwat. They have one
common question, what is the sustainability of Akhuwat?
Professor Malcolm Harper answers this question in the following
words:
“Why a programe which depends on brotherhood, generosity
and goodwill should be any “less sustainable”, than one which
depends on purely financial incentives?”
* To provide interest free microfinance services to poor
families enabling them to become self reliant.
* To promote qard-e-hasana as a viable model and a
broad-based solution for poverty alleviation.
* To provide social guidance, capacity building and
entrepreneurial training.
* 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.
OBJECTIVES
* Experience of more than nine years.
* Trained workforce of more than 200 employees.
* Equipped with fully developed policies, processes and systems.
* Support of more than 700 local donors.
* Registered with Government of the Punjab and Pakistan Center
for Philanthropy (PCP).
* Registered with Pakistan Microfinance Network (PMN).
* Enviable growth in last eight years.
* Recovery rate of 99.85%.
* No discrimination on the basis of religion, political affiliation,
caste, colour or ethnicity.
* No interest, profit or loan processing fee is charged from the
borrower.
* Presence in 22 cities and towns in Pakistan.
STRENGTHS
Source of financial institution for entrepreneurs and small businesses
lacking access to banking and related services
 Relationship-based banking for individual entrepreneurs
 Group-based models where several entrepreneurs come together to
apply for loans
LOAN
 A thing that is borrowed,especially a sum of money that is expected to
be paid back with interest
 In Finance, a loan is a debt provided by one entity to another entity at
an interest rate
MICROFINANCE WITH A DIFFERENCE
Interest free loan
• Akhuwat provides interest free loans
to the economically poor for
sustainable livelihood
• Derivate of the Qarz-e-hassan which
keeping in line with the teachings of
Islam
MICROFINANCE WITH A DIFFERENCE
Use of Islamic places
• Akhuwat model institutionalizes the use of
local religious places. For example
mosques and churches
• Historically, religious places have played a
key role as an institution for social and
economic development
• As centers for loan disbursements
MICROFINANCE WITH A DIFFERENCE
Spirit of volunteerism
• The operation of akhuwat has been based on
the concept of a social contract
• Extensive network of volunteers from all
walks of life who contribute their services
from time to time
• An ideal social enterprise employs a mixture
of volunteerism and necessary compensation
MICROFINANCE WITH A DIFFERENCE
Transforming borrowers into
donors
•Akhuwat encourages its borrowers
to donate to akhuwat’s program
•These donations are neither
compulsory nor have any bearing
on the borrowers credit profile
HISTORY
• In 2001 the idea of Akhuwat was
presented before a group of friends
at the Lahore Gymkhana. During
the conversation, charging of
exorbitant interest rates on
microfinance programs aimed at
poverty alleviation was being
criticized.The idea of initiating an
interest free successful
microfinance program was brought
forth as a challenge and at that
point, no one present foresaw the
shape this experiment would
eventually take. One of the friends
pledged a donation of ten thousand
rupees, while another friend, Dr.
Amjad Saqib, took it upon himself
to utilize that donation as an
interest free loan.
IDEA
• The first loan of ten thousand rupees was given
to a widow who was striving to earn a decent
living through honorable means. She was
neither a beggar nor was she looking for
charity; she was only seeking a helping hand.
By utilizing and returning that loan within a
period of six months, she reinforced the belief
in the integrity exhibited by the poor when they
are helped with trust and respect.The success
of the first loan brought in more donations and
the group of friends became convinced of the
viability of their venture into interest free
microfinance. HereinAkhuwat was born, with
these friends forming the first Board of
Governors and Dr. Amjad Saqib serving as the
first Executive Director.This marked the
beginning of a new chapter in microfinance,
one that found its inspiration not in economic
logic but in the spirit of compassion and
generosity of mankind.
First loan
Akhuwat derives its name from ‘mwakhaat’ or
brotherhood, the earliest example of which was seen
in the fraternity formed by the Ansars (citizens of
Medina) and the Muhajireen (or Meccans) who had
migrated to Medina to escape religious oppression.
Inspired by the spirit which induced the Medinites to
share half of their wealth with the migrants, Akhuwat
seeks to invoke this very concept of brotherhood
through its operations. For Akhuwat, the metaphor of
brotherhood entails the creation of a system based on
mutual support in society. To this end microfinance is
only one of the tools, though a powerful one, being
employed by Akhuwat.
In the initial years, Akhuwat was simply a generous
exercise to see how interest free microfinance would fare.
Over time however donations increased manifold with the
momentum of the movement accelerating far beyond the
expectations of its founders. By 2003 donations to
Akhuwat had reached rupees 1.5 million with the loan
recovery rate remaining a steadfast 100%. Consequently it
was decided to formalize the organization and ‘Akhuwat’
was registered under the Societies Registration Act of
1860. The first branch was opened at Township, Lahore
and subsequently operations began to expand.
With the passage of time Akhuwat’s
branches were opened outside Lahore,
loan products were diversified, the trade
was expanded and the message of
Akhuwat began to rapidly spread. The
movement was being spearheaded by the
generosity of the Civil Society as Akhuwat’s
reliance on generosity entailed tapping into
the spirit of giving and volunteerism in the
society.
In the absence of interest rates and minimal
registration fee (in 2011, the registration fee
was Rs100/ 1.14 USD), every effort was made to
ensure operation costs were kept very low.
Extreme simplicity in operational activities,
plain offices, use of religious places, high levels
of volunteerism in the workforce ensured that
Akhuwat realized its aim of minimal operational
costs. To complement the efficient operational
strategies of the organization, four core
principles were identified; interest free loans,
use of religious places, spirit of volunteerism
and transforming borrowers into donors. These
principles in time became the defining features
of the Akhuwat Model.
With the success of the Akhuwat Model, it began to feature into the curriculum of
renowned international and national universities. Guided by the four core principles,
operational methodologies were further refined and documented. International
microfinance institutions and patrons also began to show interest in introducing
Akhuwat in their own countries and it is envisioned that the message of Akhuwat
will spread beyond the borders of Pakistan in the coming years.
TARGET AUDIENCE
AND FUNDING
SOURCES
TARGET AUDIENCE
• People who aren’t given any monitory help by anyone in the society
provided that they have the guarrentiar .
• People who need housing loans .
• ( these are those people who mostly live in poor conditioned houses )
• People who cant afford health care services.
FUNDING SOURCES
• Government Officials
• Foreign Aids
• Business mans
• Borrowers are the donors
MARKETING &
ADVERTISING
INFORMATION OF
AKHUWAT
MARKETING & ADVERTISING
INFORMATION OF AKHUWAT
Akhuawat makes use of a strong
message for both sponsors and
beneficiaries.
AKUWAT message is :
‘’Without Interest small loans ‘’
MEANS OF ADVERTISEMENT
• Means of advertisement are marketing strategies focusing
on message to reach out to sponsors to donate generously
and at the same time to attract and identify potential
beneficiaries through media and public gatherings
• Print Media
• Electronic media
• Social media
• Cooperate website
PRINT MEDIA
Newspapers
Business Magazines
Pamphlets & Broche ruse
ELECTRONIC MEDIA
Television
Radio
Cable
SOCIAL MEDIA
• Facebook
CORPORATE WEBSITE
• Organization Website:
www.akhuwat.org.pk
PUBLIC FORUMS
Universities
Workshops, conferences
& Seminars
Public/Donor events
BeneficiaryTraining Events
for future beneficiaries
INFORMATION SESSIONS
• Foreign & domestic
information sessions
conducted by CEO
PUBLIC REPRESENTATIVES
• Disbursement of
funds by Chief
Minister for
Akhuwat
Beneficiaries
HEALTH SECTOR
• Extending help to
patients & people
needing medical
treatment
HOLY PLACES AS A SOURCE OF
INTERACTION
• Distribution of
cheques at mosques
, churches and holy
shrines
VERIFICATION PROCESS
• Potential Beneficiaries identified and verified through
mosques and churches
MARKETING ADVERSTISEMENT
MESSAGE
Very strong message through logo
Through pictures which capture the need of donation
Success stories of beneficiaries
Word of mouth through beneficiaries
Publicity of youngVolunteers
REQUEST FOR DONATION
‘’AKHUWAT’’ requests the donors , sponsors to actively donate on
a monthly quarterly or annually basis .
There is specific memo or letter of communication written in
this regard.
Successful donations are recorded and maintained in
database
A personalized note of thanks is sent by CEO
MARKETING INFORMATION SYSTEM
DATABASE
• AKHUWAT
maintains a
marketing
information system
database.
• This ensures a
strong relationship
with donors and
beneficiaries.
• Youngsters are
encouraged to work
as volunteers.
CHAMPIONINGTHE AKHUWAT CAUSE
• The Chief Executive Officer (DR:Amjad Saqib ) ensures a consistent
marketing and advertising message through
• Website
• Newspaper
• Magazines
AKHUWAT LOGO
• The Logo represents a philanthropist message spirit
• A pair of careful hands providing support to both males
and females
• Logo is often represented as a picture
AKHUWAT COMPEPTITION
COMPETITORS OF “AKHUAT’’
All Micro financingOrganizations including.
COMPETITORS OF “AKHUAT’’
Financial institutions ( i.e. Banks)
•Akhuwat is dedicated to improving the lives of the poor; those
who are financially abused, abandoned and disregarded by
society. As a registered non-governmental organization,
Akhuwat provides the poor with interest-free loans so that they
may acquire a livelihood and reach their full potential. Akhuwat
provide such services to the needy people which any
foundation, any NGO, any microfinance institution is not
giving.
INTEREST FREE LOAN
•Akhuwat philosophy is based on the principle of
Qarze-e-Hasana so foundation help people with
interest free loans, which are preferred over charity.
Whereas other micro-finance institutions (MFIs)
generally charge annual interest rates of between 20-
30%.
NUMBER OF BRANCHES.
Another advantage that Akhuwat has over its competitors its number of
branches. Akhuwat foundation started its operations in Lahore in 2001 and has
shown rapid growth since 2003 and expand its branch network across the
country.
At present,
• 17 branches in the Punjab
• overall it has 260 branches in 120 cities whereas 40 more branches are under
process
LOAN RECOVERY RATE
• The overall recovery rate of loans is estimated 99.85 %. Whereas The
repayment on group loans has been 98.4% and the repayment rate on the
individual household borrowers is 99.9%.
CULTURE & OPERATING STYLE
Akhuwat offices :
• small and simple
• very little furniture
• ‘Farshi’ seating arrangements with cushions and low tables to keep the costs
low.
CULTURE & OPERATING STYLE
Along with culture its operating style also unique. Akhuwat marketed and
disbursed loans through mosques. Each Akhuwat branch is associated with a
particular mosque because having meetings at the mosque actually makes the
loan recipients feel more obligated to pay back the loans, Akhuwat has also
made use of a local church to serve its Christian clients.
However, no NGO disbursed loan in this way.

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Akhuwat 4

  • 1.
  • 2.
  • 3. THE STORY There was a poor widow who once came to bureaucrat seeking for financial help. He could see the guilt and shame in her eyes at that moment. Rejected by her friends and family, she was forced to beg. He asked her “why do you need the money” She replied “I want to buy a swing machine in order to earn my livelihood” On that spot he had an idea , in order to maintain her dignity , he gave her a loan of RS:10,000/- instead of charity with the promise to return the money when ever she could afford to. She returned the entire amount within six months and in this time period she was able to marry her daughter and earn a decent living. A family was saved from the clutches of poverty and a new journey had begun
  • 4.
  • 5.
  • 6. which started from a wooden cabin and staff of two people has extended to 256 branches in 136 cities and towns. The scholars from Oxford to Harvard are astonished at the miracle of Aukuwat. They are thinking how it is possible to run a micro finance scheme on 0% interest rate. Yes, it has become possible. A renowned professor of micro-finance, Malcolm Harper, comes to Pakistan to see this miracle with his own eyes. About five hundred scholars of the world gather at Harvard University and listen to the successful story of Akhuwat. They have one common question, what is the sustainability of Akhuwat? Professor Malcolm Harper answers this question in the following words: “Why a programe which depends on brotherhood, generosity and goodwill should be any “less sustainable”, than one which depends on purely financial incentives?”
  • 7.
  • 8.
  • 9.
  • 10.
  • 11. * To provide interest free microfinance services to poor families enabling them to become self reliant. * To promote qard-e-hasana as a viable model and a broad-based solution for poverty alleviation. * To provide social guidance, capacity building and entrepreneurial training. * 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. OBJECTIVES
  • 12. * Experience of more than nine years. * Trained workforce of more than 200 employees. * Equipped with fully developed policies, processes and systems. * Support of more than 700 local donors. * Registered with Government of the Punjab and Pakistan Center for Philanthropy (PCP). * Registered with Pakistan Microfinance Network (PMN). * Enviable growth in last eight years. * Recovery rate of 99.85%. * No discrimination on the basis of religion, political affiliation, caste, colour or ethnicity. * No interest, profit or loan processing fee is charged from the borrower. * Presence in 22 cities and towns in Pakistan. STRENGTHS
  • 13.
  • 14.
  • 15.
  • 16. Source of financial institution for entrepreneurs and small businesses lacking access to banking and related services  Relationship-based banking for individual entrepreneurs  Group-based models where several entrepreneurs come together to apply for loans
  • 17. LOAN  A thing that is borrowed,especially a sum of money that is expected to be paid back with interest  In Finance, a loan is a debt provided by one entity to another entity at an interest rate
  • 18. MICROFINANCE WITH A DIFFERENCE Interest free loan • Akhuwat provides interest free loans to the economically poor for sustainable livelihood • Derivate of the Qarz-e-hassan which keeping in line with the teachings of Islam
  • 19. MICROFINANCE WITH A DIFFERENCE Use of Islamic places • Akhuwat model institutionalizes the use of local religious places. For example mosques and churches • Historically, religious places have played a key role as an institution for social and economic development • As centers for loan disbursements
  • 20. MICROFINANCE WITH A DIFFERENCE Spirit of volunteerism • The operation of akhuwat has been based on the concept of a social contract • Extensive network of volunteers from all walks of life who contribute their services from time to time • An ideal social enterprise employs a mixture of volunteerism and necessary compensation
  • 21. MICROFINANCE WITH A DIFFERENCE Transforming borrowers into donors •Akhuwat encourages its borrowers to donate to akhuwat’s program •These donations are neither compulsory nor have any bearing on the borrowers credit profile
  • 23. • In 2001 the idea of Akhuwat was presented before a group of friends at the Lahore Gymkhana. During the conversation, charging of exorbitant interest rates on microfinance programs aimed at poverty alleviation was being criticized.The idea of initiating an interest free successful microfinance program was brought forth as a challenge and at that point, no one present foresaw the shape this experiment would eventually take. One of the friends pledged a donation of ten thousand rupees, while another friend, Dr. Amjad Saqib, took it upon himself to utilize that donation as an interest free loan. IDEA
  • 24. • The first loan of ten thousand rupees was given to a widow who was striving to earn a decent living through honorable means. She was neither a beggar nor was she looking for charity; she was only seeking a helping hand. By utilizing and returning that loan within a period of six months, she reinforced the belief in the integrity exhibited by the poor when they are helped with trust and respect.The success of the first loan brought in more donations and the group of friends became convinced of the viability of their venture into interest free microfinance. HereinAkhuwat was born, with these friends forming the first Board of Governors and Dr. Amjad Saqib serving as the first Executive Director.This marked the beginning of a new chapter in microfinance, one that found its inspiration not in economic logic but in the spirit of compassion and generosity of mankind. First loan
  • 25. Akhuwat derives its name from ‘mwakhaat’ or brotherhood, the earliest example of which was seen in the fraternity formed by the Ansars (citizens of Medina) and the Muhajireen (or Meccans) who had migrated to Medina to escape religious oppression. Inspired by the spirit which induced the Medinites to share half of their wealth with the migrants, Akhuwat seeks to invoke this very concept of brotherhood through its operations. For Akhuwat, the metaphor of brotherhood entails the creation of a system based on mutual support in society. To this end microfinance is only one of the tools, though a powerful one, being employed by Akhuwat.
  • 26. In the initial years, Akhuwat was simply a generous exercise to see how interest free microfinance would fare. Over time however donations increased manifold with the momentum of the movement accelerating far beyond the expectations of its founders. By 2003 donations to Akhuwat had reached rupees 1.5 million with the loan recovery rate remaining a steadfast 100%. Consequently it was decided to formalize the organization and ‘Akhuwat’ was registered under the Societies Registration Act of 1860. The first branch was opened at Township, Lahore and subsequently operations began to expand.
  • 27. With the passage of time Akhuwat’s branches were opened outside Lahore, loan products were diversified, the trade was expanded and the message of Akhuwat began to rapidly spread. The movement was being spearheaded by the generosity of the Civil Society as Akhuwat’s reliance on generosity entailed tapping into the spirit of giving and volunteerism in the society.
  • 28. In the absence of interest rates and minimal registration fee (in 2011, the registration fee was Rs100/ 1.14 USD), every effort was made to ensure operation costs were kept very low. Extreme simplicity in operational activities, plain offices, use of religious places, high levels of volunteerism in the workforce ensured that Akhuwat realized its aim of minimal operational costs. To complement the efficient operational strategies of the organization, four core principles were identified; interest free loans, use of religious places, spirit of volunteerism and transforming borrowers into donors. These principles in time became the defining features of the Akhuwat Model.
  • 29. With the success of the Akhuwat Model, it began to feature into the curriculum of renowned international and national universities. Guided by the four core principles, operational methodologies were further refined and documented. International microfinance institutions and patrons also began to show interest in introducing Akhuwat in their own countries and it is envisioned that the message of Akhuwat will spread beyond the borders of Pakistan in the coming years.
  • 31. TARGET AUDIENCE • People who aren’t given any monitory help by anyone in the society provided that they have the guarrentiar . • People who need housing loans . • ( these are those people who mostly live in poor conditioned houses ) • People who cant afford health care services.
  • 32. FUNDING SOURCES • Government Officials • Foreign Aids • Business mans • Borrowers are the donors
  • 34. MARKETING & ADVERTISING INFORMATION OF AKHUWAT Akhuawat makes use of a strong message for both sponsors and beneficiaries. AKUWAT message is : ‘’Without Interest small loans ‘’
  • 35. MEANS OF ADVERTISEMENT • Means of advertisement are marketing strategies focusing on message to reach out to sponsors to donate generously and at the same time to attract and identify potential beneficiaries through media and public gatherings • Print Media • Electronic media • Social media • Cooperate website
  • 39. CORPORATE WEBSITE • Organization Website: www.akhuwat.org.pk
  • 40. PUBLIC FORUMS Universities Workshops, conferences & Seminars Public/Donor events BeneficiaryTraining Events for future beneficiaries
  • 41. INFORMATION SESSIONS • Foreign & domestic information sessions conducted by CEO
  • 42. PUBLIC REPRESENTATIVES • Disbursement of funds by Chief Minister for Akhuwat Beneficiaries
  • 43. HEALTH SECTOR • Extending help to patients & people needing medical treatment
  • 44. HOLY PLACES AS A SOURCE OF INTERACTION • Distribution of cheques at mosques , churches and holy shrines
  • 45. VERIFICATION PROCESS • Potential Beneficiaries identified and verified through mosques and churches
  • 46. MARKETING ADVERSTISEMENT MESSAGE Very strong message through logo Through pictures which capture the need of donation Success stories of beneficiaries Word of mouth through beneficiaries Publicity of youngVolunteers
  • 47. REQUEST FOR DONATION ‘’AKHUWAT’’ requests the donors , sponsors to actively donate on a monthly quarterly or annually basis . There is specific memo or letter of communication written in this regard. Successful donations are recorded and maintained in database A personalized note of thanks is sent by CEO
  • 48. MARKETING INFORMATION SYSTEM DATABASE • AKHUWAT maintains a marketing information system database. • This ensures a strong relationship with donors and beneficiaries. • Youngsters are encouraged to work as volunteers.
  • 49. CHAMPIONINGTHE AKHUWAT CAUSE • The Chief Executive Officer (DR:Amjad Saqib ) ensures a consistent marketing and advertising message through • Website • Newspaper • Magazines
  • 50. AKHUWAT LOGO • The Logo represents a philanthropist message spirit • A pair of careful hands providing support to both males and females • Logo is often represented as a picture
  • 52. COMPETITORS OF “AKHUAT’’ All Micro financingOrganizations including.
  • 53. COMPETITORS OF “AKHUAT’’ Financial institutions ( i.e. Banks)
  • 54. •Akhuwat is dedicated to improving the lives of the poor; those who are financially abused, abandoned and disregarded by society. As a registered non-governmental organization, Akhuwat provides the poor with interest-free loans so that they may acquire a livelihood and reach their full potential. Akhuwat provide such services to the needy people which any foundation, any NGO, any microfinance institution is not giving.
  • 55. INTEREST FREE LOAN •Akhuwat philosophy is based on the principle of Qarze-e-Hasana so foundation help people with interest free loans, which are preferred over charity. Whereas other micro-finance institutions (MFIs) generally charge annual interest rates of between 20- 30%.
  • 56. NUMBER OF BRANCHES. Another advantage that Akhuwat has over its competitors its number of branches. Akhuwat foundation started its operations in Lahore in 2001 and has shown rapid growth since 2003 and expand its branch network across the country. At present, • 17 branches in the Punjab • overall it has 260 branches in 120 cities whereas 40 more branches are under process
  • 57. LOAN RECOVERY RATE • The overall recovery rate of loans is estimated 99.85 %. Whereas The repayment on group loans has been 98.4% and the repayment rate on the individual household borrowers is 99.9%.
  • 58. CULTURE & OPERATING STYLE Akhuwat offices : • small and simple • very little furniture • ‘Farshi’ seating arrangements with cushions and low tables to keep the costs low.
  • 59. CULTURE & OPERATING STYLE Along with culture its operating style also unique. Akhuwat marketed and disbursed loans through mosques. Each Akhuwat branch is associated with a particular mosque because having meetings at the mosque actually makes the loan recipients feel more obligated to pay back the loans, Akhuwat has also made use of a local church to serve its Christian clients. However, no NGO disbursed loan in this way.