Mass poverty is an intractable reality in Pakistan and much of the world. Poverty reduction programs are urgently needed and microfinance institutions are a real lifeline for the poor. Yet, though Pakistan is in a region that is a global center of the microfinance movement, about fifty million Pakistanis still live below the national poverty line. Clearly, much more work remains to be done.
One organization and its founder are breaking fresh ground in the fight against poverty. MUHAMMAD AMJAD SAQIB, sixty-four years old and highly educated, has worked as a consultant on social development for Pakistan’s government and international development organizations. In 2001, SAQIB invited a group of friends (all successful professionals and businessmen) to present to them his plan for a first-of-its-kind interest-free microfinance program, offering to design, organize, and implement it. Enthusiastic, his friends pledged their support, and funds were raised to capitalize the project. Two years later, Akhuwat was formed and its first branch opened in Lahore.
The most interesting aspect of Akhuwat is its concept and philosophy. Akhuwat (brotherhood or sisterhood) is an approach to poverty alleviation that SAQIB introduced based on the values of the Islamic tradition of Mawakhat that has for its core the Prophet Mohammed’s teaching: that if one has a loaf of bread, half of it rightly belongs to a person who has none. Related to this is the idea that charging interest (riba) on a loan is un-Islamic, hence the practice of the “benevolent loan” which, SAQIB reminds us, was already there in early human societies. “We just institutionalized it,” SAQIB says. Akhuwat uses places of worship for loan disbursements, saving on costs and instilling the sense of trust, responsibility and community that a mosque, church, or temple creates. It also promotes volunteerism among staff and clients; aims at transforming borrowers into donors; and fosters diversity and inclusion, serving all—irrespective of religion, caste, color, and gender.
All these have proved to be a winning formula. Today, Akhuwat is the largest microfinance institution in Pakistan, offering a package of loans for the poor. It has distributed 4.8 million interest-free loans amounting to the equivalent of USD900 million, helping three million families, with a remarkable 99.9% loan repayment rate.
Its phenomenal growth has fueled Akhuwat’s social support programs in fields like education, where, in partnerships with government and others, Akhuwat has “adopted” hundreds of neglected and non-functioning public schools and established four residential colleges (one of them for women), and soon a university, for poor and deserving students. Akhuwat runs a health services program, helping hundreds of thousands of patients; a “clothes bank” that has distributed more than three million clothes for the needy; and a program of economic, health, and psycho-social services for the discriminated khwaja sira (transgender) community. In the Covid-19 pandemic, Akhuwat responded with emergency loans and grants, food relief, and other assistance in over a hundred cities in Pakistan.
People were skeptical about the sustainability of a no-interest, no-collateral loan program (one that only asks a borrower for a USD1.26 application fee and an optional mutual support contribution of 1.0% of the loan amount). SAQIB is not worried. The Prophet’s story of the loaf of bread, the call for empathy and solidarity, has inspired him and stirred many donors to help. SAQIB has succeeded not only because of his expertise in this field but because he embraced the work of helping the poor as a call to faith. Empathy and optimism in human goodness are central to his work. He says: “Akhuwat is a philosophy. It is now a mission of millions. Until a poverty-free society has been created, we won’t let go. As long as there is an element of good and empathy in society, Akhuwat will continue.”
In electing MUHAMMAD AMJAD SAQIB to receive the 2021 Ramon Magsaysay Award, the board of trustees recognizes the intelligence and compassion that enabled him to create the largest microfinance institution in Pakistan; his inspiring belief that human goodness and solidarity will find ways to eradicate poverty; and his determination to stay with a mission that has already helped millions of Pakistani families.
1963, Akhtar Hameed Khan. 1992, Sultan Shoaib Khan. And now in 2021, I have joined my mentors and fellow countrymen in receiving Asia’s most prestigious award. I am truly humbled.
I am no more than a torchbearer of a flame ignited by them. Today, I take pride in walking along the path they have laid. There could be no greater honor. When an award is passed from teacher to student, it is no longer the recognition of an individual’s efforts but the validation of a concept and a legacy.
Awards like this have special significance. They are not what you receive for an uphill task of climbing to the pinnacle but instead, they are received for working on the ground and taking pride in the collective rise. This is an award that does not set you apart but unifies you with humankind. That for me is the epitome of Akhuwat, the brotherhood of mankind, my entire life’s work and passion.
I started my career in the civil service of Pakistan and later parted ways but in hindsight, it equipped me for the journey ahead. My work itself is neither new, nor innovative, and I learned from no other than the teacher of all Muslims, Prophet Muhammad (PBUH). He (PBUH) laid the foundation for the eradication of poverty through the message of Mawakhat or solidarity, whereby one household gives part of its possessions to one that has nothing, one neighborhood takes care of the financial hardships of another, and one community accepts the responsibility to build one that has fallen.
This is a simple yet profound formula for the equitable distribution of wealth. With this comes hand in hand the concept of small loans free from interest and service charges, in the tradition of the Prophet (PBUH) and in fact all religions. The world is now beginning to realize the grave reality of rising interest rates that are bringing the world economy to its knees and sending individuals and nations into spiraling debt. Economists have long tried to resolve the issue of world poverty. But let me remind you of one such solution that was given 1400 years ago. We at Akhuwat, have only reiterated the same methodology of Mawakhat and interest and collateral-free microfinance and with it the intrinsic belief in the goodness of humankind.
I am privileged to declare that Akhuwat has received the greatest support from the people of Pakistan. Equally, the Government of Pakistan has committed to the eradication of poverty and equitable growth for all. Our beneficiaries are our supporters, our successors, and our friends. They are the most trustworthy, and dedicated individuals who despite the impediments they face, remind us to stay resilient in the face of adversity.
I would like to express my humble gratitude to Akhuwat’s Board of Directors for their unwavering support and commitment towards our collective vision of creating a poverty-free world. I thank my friends, each and every one of our donors for taking Akhuwat to a global level and helping us to establish the world’s largest interest-free microfinance program.
Skeptics always said such programs are not sustainable. Yes, these are not sustainable but by the grace of God and the spirit of sacrifice & giving, programs like Akhuwat stood where economic wisdom ends as these programs don’t believe in “my share” or “cut-throat” competition. They believe in sharing and altruism. The spirit of giving is pervasive.
I would not be standing before you if it was not for the employees and volunteers of Akhuwat working selflessly in 400 cities across Pakistan. I wish to thank all of you for your dedication, your commitment, and above all your faith when many would ridicule the concept of interest-free microfinance. You believed when others doubted. Turning a fool’s dream into a pragmatic reality. I thank the Akhuwat family which never breached our trust and made possible an unbelievable 100% rate of return that to date puzzles the economic pundits.
When you take on a family as large as Akhuwat, you cannot help but at times sacrifice the moments you could be spending with your own family. My wife, Farrukh, and my children Junaid, and Farazeen – it has been your continuous love that has given me the strength that I needed to carry forward this mission. It was your support and fortitude that have given me the inner peace to take on the turmoil outside. Thank you for sharing the weight on my shoulders by always standing by my side.
My heartfelt gratitude to the trustees of the Ramon Magsaysay Award Foundation. It is my pledge on behalf of Pakistan, that we will continue our struggle till we reach our goal of a peaceful and poverty-free world.
To conclude, I would like to remember the man in whose honor we all are gathered here, the incomparable Ramon Magsaysay who said that a country is like a pyramid, like a tower. It is made up of millions of stones and the foundation stone of this pyramid is the common man.
Ladies and gentlemen, today, with immense appreciation I accept this Award on behalf of every foundation stone, on behalf of the common man and woman whose commitment and faith in goodness, piety, and in a prosperous future remains unshaken. I am grateful to be a part of the Magsaysay community, creating new bonds of solidarity with friends from Asia.
I believe the solution for poverty will be achieved by working in solidarity with the poor. Poverty is pain. Poverty is poison. We all remain poor until every single person in this world is poor. Let’s rise. Together, we will instill hope and become a voice for the voiceless.