Akhuwat is a non-profit microfinance organisation based in the city of Lahore in Pakistan. It provides interest-free loans to low income sectors of the population throughout Pakistan, although most of the loans it provides are in the most populous province of Punjab and the focus has been largely on urban areas. Akhuwat derives its name from the concept of ‘mawakhaat’ or brotherhood. It is a completely independent organisation with no political or religious ties to other bodies and provides loans to people of all religious faiths. Akhuwat has been operating continuously since it was established in 2001.
What is Akhuwat’s mission?
Akhuwat’s mission is to ‘alleviate poverty by empowering socially and economically marginalised families through interest free microfinance and by harnessing entrepreneurial potential, capacity building and social guidance’.
What types of financial services does Akhuwat provide?
Mainly Akhuwat provides ‘family enterprise loans’ that aim to establish new or expand existing businesses. However, it also offers several other types of loans that include helping people who have become severely indebted through high interest loans from moneylenders, and for dealing with educational, health or emergency expenditure. Approximately one-third of loans are given to women.
How much interest does Akhuwat charge?
Akhuwat does not charge any interest whatsoever to borrowers. Borrowers simply repay the amount that they have borrowed. This is because it is a Shari’ah compliant microfinance institution and interest is prohibited in Islam. The loans that Akhuwat provides are referred to as Qard Hasan or benevolent loans in Islamic teachings. However, it does charge all borrowers a standard one-off application fee of 200 rupees for each loan which is the equivalent of about £1.20. It covers its own operational costs through voluntary donations from well-wishers.
Does Akhuwat provide any training?
It does not provide any specific training, although new borrowers with no skills may be linked with existing skilled borrowers. Akhuwat does however provide some basic health services, particularly related to diabetes and pregnancy, for a minimal fee for borrowers and non-borrowers alike in the city of Lahore.
Where can I find out more information about Akhuwat?
Akhuwat: Basic facts and figures
|Average loan size:||US$179|
|Total number of active borrowers:||512,624
|Proportion of loans given to women:||41%
|Total loan portfolio:||US$65,483,360
|Portfolio at Risk (PAR) at 30 days:||0.28%|
Pakistan: Basic facts and figures
|Life expectancy at birth:||68 years|
|Adult literacy rate:||58%|
|Access to improved water source:||91%|
|Infant mortality rate:||54 per 1,000 live births|
|Maternal mortality rate:||178 per 100,000 live births|
|GDP per capita:||US$1,316|