An Exclusive Interview with Dr. Amjad Saqib, Executive Director & Founder of Akhuwat – The World’s Largest Islamic Microfinance Program
An MBBS doctor, Dr. Amjad Saqib was selected for the nation’s topmost bureaucratic institution, the elite Civil Service of Pakistan after clearing its examination with great distinction in 1985. Having stood out as a public servant, right when his career was about to move towards higher echelons, he resigned in 2003 with the intent to dedicate himself to becoming a social entrepreneur and make a difference in societal change through Akhuwat – which had already been launched in 2001 and had meanwhile started taking strides towards the force it was to become.
Akhuwat is his real passion but he also renders honorary other services for many other NGOs. He is Vice Chairman Punjab Educational Endowment Fund, Chairman Management Committee Fountain House, Honorary Managing Director Punjab Welfare Trust for the Disabled, Member Board of Director Punjab Education Foundation, Member Syndicate Punjab University, Commissioner Punjab Health Care Commission, Member Punjab Red Crescent Society. Recently, Mian Nawaz Sharif, Prime Minister of Pakistan appointed him Chairman Steering Committee for Prime Minister’s Qarz-e-Hassan Programme.
Q: Which model of Islamic Microfinance do you practice? How much is it helpful in addressing the issue of poverty?
A: We practice the Islamic ‘No Interest’ Qarz-e Hassan model. The basic premise, the guiding assumption is that the flow of donations should come from the haves and be channeled towards the have-nots with the intent to provide them an opportunity to become self-reliant entrepreneurs.
For so long as there are donors willing to fund it, and the beneficiaries own the programme to the extent of the borrowers eventually becoming donors, Akhuwat shall not just survive but thrive and prosper insha Allah.
That was our initial assessment, and it was ingrained in our faith in ourselves as well as the power of the idea.
Our 13 year history is proof positive of not just the success of the idea, but its implementation on the ground. Akhuwat has been quite tangibly responsible in alleviating poverty.
And this is reflected in the figures: so far nearly half a million families have benefitted through borrowing from Akhuwat, by establishing small businesses. Nearly half of these, about one quarter of a million, are active borrowers. Quite a few of these have borrowed multiple loans, meaning thereby that Akhuwat not just helped them establish their businesses initially but also supported them in their growth and expansion.
Another proof of the Akhuwat philosophy rubbing off on the borrowers is that most of them, indeed an overwhelming majority of them, have donated to the cause, thus returning to the organization so that it could serve new borrowers like it had when they were in need of assistance.
What is indeed most satisfying for its founders is that over a period of 14 years, Akhuwat has settled the sustainability question that was asked of it by such luminaries as Nobel laureate and microfinance guru Dr Muhammad Younus and Mr. Shaukat Aziz, former Prime Minister of Pakistan.
Q: What is your vision and observation about Islamic Microfinance Industry in Pakistan?
A: Well, I generally avoid commenting on what others are doing. That said, microfinance in its various shades and models has benefitted those who had no access to any kind of finance for they lacked collateral. In that sense it has provided that window of opportunity to those on which the traditional banking had shut its doors.
As for the vision, in my view, rooted in the philosophy of sharing, Islamic microfinance is one true vehicle that can impact poverty alleviation like nothing else in this world. As I have said before, microfinance afforded liquidity to those who did not have access to normal channels of funding to put their ideas and energies to best use. Yet it does encumber them with interest. So, in my view, it is purely Islamic microfinance, with ‘No Interest’ as its cornerstone, alone has the capacity to lift the poorest of the poor by their bootstraps.
Apart from faith-based microfinance, Akhuwat’s vision and aspiration is in a number of other areas – health, education, clothing, Khawajasira Rehabilitation programme etc. All these have already been launched, and when in full flow, these shall make a contribution in being a harbinger of societal change and uplift of the downtrodden and the marginalized.
Akhuwat’s intent is well being of everybody it touches in spheres like economy, health and education but also in assisting them regaining full measure of their dignity and self-respect.
Q: What is the impact of your program on the lives of your clients and do you have any Impact Assessment Report?
A: We have several studies to judge the positive impact of Akhuwat, the greatest of these being 99.86 per cent rate of recovery. Failed enterprises are incapable of paying back their debt. Second, our borrowers have become donors, and so far have voluntarily contributed in the vicinity of Rs100 million. Akhuwat’s relationship with its borrowers is not limited to financial transaction but imbuing a spirit of camaraderie. Our volunteers and borrowers have combined to help establish new businesses for fresh borrowers.
In addition to the successful mobilization and engagement with communities, independent research has also demonstrated how Akhuwat’s microfinance program is also leading to improvement in other development indicators. This includes greater enrollment of young girl’s in schools in communities where Akhuwat works, improved food security of Akhuwat’s borrowers and families, improved access to health care and decreases in fatalities resulting from minor health-care problems. The creation of Akhuwat Health Services and Akhuwat Educational Assistance program are also facilitating these trends by ensuring that non-financial limitations of the poor are addressed. For Akhuwat, microfinance is a means to an end and not an end in itself, the end being a vibrant, economically strong and self-confident society, where everyone is socially responsible and shares his resources with others in a spirit of brotherhood.
Q: What are the main operational problems or challenges do you face in Islamic Micro financing?
A: Well, actually there are many challenges that one faces, especially at the scale that Akhuwat Alhamdulillah now operates and at the rapid rate that it is now expanding. The core issue always remains financial sustainability. And this does not exclusively mean the volume of donations keeping pace with the existing and projected operations. Since at Akhuwat we are acutely aware that the core purpose is to dedicate in percentage terms the greatest possible volume of donations to lending, we try our utmost to keep the operational costs as low as possible. Overall Akhuwat has been a no-frills organization that puts great onus on simplicity and empathizing with our borrowers. This has meant great savings in our collective loan disbursement ceremonies being held in mosques, shrines, churches and temples. Our offices are low-cost, low-maintenance and located in the downscale neighborhoods where the overwhelming majority of our borrowers reside. Still with the operations expanding at the breakneck pace, and our network now having a countrywide footprint, despite our reliance on volunteers, keeping a lid on the administrative costs is a matter requiring constant diligence.
At the moment, Akhuwat’s employees number 1,400. And we have for each of them 10 volunteers in the active service of Akhuwat, nearly 14,000 to 1,400. But keeping the staff continuously motivated with the spirit of service is another challenge.
Yet another area of concern is ever-increasing poverty. Despite the enormous increase in our outreach over the last few years, actually doubling year on year for the last many years, the rise in sheer numbers wanting assistance has also increased by manifold.
These challenges remain, but Akhuwat is by no means overawed by them, for we believe that challenges are opportunities that test us only to bring the best out of us.
Q: What steps does your organization take to increase its outreach of services?
A: By continuously expanding, opening new branches and extending the borrower base. At this point in time, Akhuwat has nearly 250,000 active borrowers. This number shall continue to grow inshaAllah.
Q: What is it about Islamic microfinance that excites you?
A: Its base is Mawakhat, as I have said before, its philosophy of sharing, of compassion. And the difference Akhuwat has demonstrated it can make by relieving people and their businesses from the curse of interest.
And, of course, the sheer relief and satisfaction writ large on the faces of the borrowers where they feel genuinely assisted in their ambition, in their entrepreneurship without the burden of interest. An even greater excitement is when a fledgling business starts growing, and our first-time borrower returns for another loan to aim a notch higher. But the greatest thrill of them all is this feeling that entire families, especially children are benefiting from our intervention. This is something that keeps everyone in Akhuwat, especially the employees and volunteers dedicating themselves with a missionary zeal, aiming ever higher.
Q: What is the geographical breakdown of your clients in urban, semi-urban and rural areas?
A: Akhuwat as we speak has 256 offices in 140 cities across the country, and a loan is being disbursed every three minutes on average. The Punjab and Gilgit-Baltistan governments are already using Akhuwat as the main conduit of their poverty alleviation programs.
The location of Akhuwat branches is everywhere, but urban areas definitely have a far larger share in the overall makeup of the organization.
Q: What is the mission of Akhuwat?
A: To keep on attacking poverty until it is eliminated from this country and from this world. And while we are at it, to keep on expanding in other sectors as well to make a societal change. Akhuwat is no longer your run-of-the-mill NGO. It has already been turned into a movement, and it is now successfully contributing in more areas than microfinance and fast becoming a true catalyst for change. Our Liberation Loans have liberated hundreds from the clutches of loan sharks. Our Akhuwat Health Services are providing quality medical care for free. Our KhawajaSira Rehabilitation programme is providing material assistance as well as a shoulder to cry on to the discards of society. And the just launched initiative of Akhuwat Clothes Bank shall do its utmost to cloth the needy to protect them from the vagaries of weather with dignity at no cost.
But the greatest of them all, the Akhuwat University, where every student meriting higher education will be able to enroll him/her on the basis of deferred payment, has just been unveiled. The land for the University has already been bought in Lahore, and the theme of its donation campaign is ‘Buy a Brick’ for Rs1,000/-. The moment we have ‘sold’
150,000 bricks, half the projected cost of construction would have been realized and the foundation stone shall be laid.