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.