From Interest-Free Microfinance To Coronavirus Outbreak

Akhuwat\’s s model is a truly remarkable innovation in the micro-finance sector. According to World Economic Forum “Akhuwat” has disbursed around $600 million in loans among the poor, 98% of which have been used to launch or expand small businesses. 

Understanding The Organization

When and how did you conceive the idea? What was the motivation behind Akhuwat?

The idea for Akhuwat came to me when a widowed woman came to my office one day and asked for a loan of Rs. 10,000 to start a business and provide a livelihood for her family. I was surprised when a couple of months later that woman returned to my office and told me how that loan had enabled her not only to sustain a living but she had used that money to marry her daughter. She told that she purchased two sewing machines and started her own small business. The motivation behind Akhuwat is simple, I believe it is our responsibility to offer support to those who do not have the means to provide for themselves and hence, empower our people to become contributing members of Pakistan. 

What are the major initiatives of Akhuwat? And what are the achievements? 

Akhuwat began in 2001 with a goal to alleviate poverty by creating solidarity between the haves and have-nots of society. Alhamdulillah, today we are the world’s largest interest-free microfinance organization and have provided PKR 107 Billion in interest-free loans to over 4 million families across Pakistan. Today, our efforts are not only limited to Microfinance but we have started Pakistan’s first free-of-cost University in Kasur, we have started Akhuwat Clothes Bank, Food Bank, Akhuwat Khawaja Sira Support Program to cater to the most marginalized segments of the society. However, the essence for Akhuwat is the strive to build a society where every citizen can live with dignity. 

What made Akhuwat the world’s largest interest-free microfinance institution in very little time? 

The dedication and support of our generous donors who continue to act as the pillar holding Akhuwat together and of course our heroes, our borrowers who have shown us that our people are trustworthy and reliable, we just need to extend a helping hand to them. This is also the victory of an idea; solidarity or Mawakhat. 

How do you raise funds? How does your donation model actually work?

Akhuwat’s funds are mobilized through two main sources, firstly we rely on donations for social investments and Alhamdulillah we have a great network of generous donors who have been donating to Akhuwat from the day it started, and with time we have only seen an increase reinforcing our faith in the ability of philanthropy to transform the lives of millions. Secondly, one of our philosophies is to transform borrowers into donors, we encourage borrowers to donate according to their own capacity so that others may benefit the same way they did. We also minimize operational costs by using mosques and churches as locations for distribution of credit and have a large support network of volunteers and honorary members who work tirelessly to ensure Akhuwat functions at minimum cost. The government of Pakistan and different provincial governments also collaborate and we implement their programs. 

How do you manage the loans recovery rate of more than 96%?

We develop a strong relationship with our borrowers, a common thing I hear from the borrowers is “I want someone else to benefit from this loan as I did”. Each loan is given in a mosque and has no interest charged on it. Alhamdulillah, our recovery rate of 99.9% proves that the people of Pakistan are reliable and trustworthy if given the chance. 

What are the next 5 years\’ goals to be achieved by Akhuwat?
In our capacity, to help as many people as possible. We intend to invest in enterprise, housing, and education. 

Understanding as an Entrepreneur

What challenges did you face and how did you overcome those obstacles to make Akhuwat world\’s largest micro-finance program? 

Like any other person, there have been obstacles in my life as well but Alhamdulillah, they did not stop me from moving forward. I face challenges every day, but I see every challenge as an opportunity to reflect and improve. With faith, you can move, mountains. 

The daily routine is one of the most important factors of success. How do you plan?

I usually have my day planned out the night before, so that I can keep track of how to optimize my and my team’s work. I do keep a diary with me that has a list of tasks that I need to focus on, but most importantly I note down ideas that I have on a daily basis which I can further ponder upon and then put into action. 

How do you lead and retain your core team?

Leadership is about transferring the knowledge that one has to others and having the ability to bring out the best capacities in a person. To do so I focus on listening to my team to understand the ideas they have and problems they might be facing. One thing that I share with my entire team is to have humility in all circumstances, I think this has helped us in developing a close-knit core team who all belief in the same mission. We never lose hope. We are always optimistic. I always stay away from anger; it hurts only you! It doesn’t solve anything. It builds nothing, but it can destroy everything. 

What is your ultimate aim in life?

To see a society where each person can live a life full of compassion and dignity. Life is an echo. What you send out, comes back. What you sow, you reap. What you give, you get. What you see in others, exists in you. Don’t judge so you will not be judged. Radiate and give love and love will come back to you. 

Who is your mentor in business? Is mentorship a necessary thing for an entrepreneur to grow? 

I believe that having a mentor is the best gift that a student can receive during the growing years of his/her life. My mentor has been Mr.Shoaib Sultan Khan, a true visionary in the field of Development Practice in not just Pakistan but across our region. He told me that a satisfied life is better than a successful life because our success is measured by others. But our satisfaction is measured by our own soul, mind, and heart. 

Any message for the young entrepreneurs of Pakistan?

Create an idealized image of yourself and try to become closer to that, soon you will begin to resemble who you wish to be at your highest potential. The second message is life is like a notebook. Two pages are written by God. The first page is birth. The last page is Death. Center pages are empty. So fill them with smiles and love. 

Understanding as a Change Maker

What is entrepreneurship to you? Can we boost Pakistan’s economy through entrepreneurship? 

Simply defined, entrepreneurship is the desire of starting something new, innovative, and beneficial for others. It is adding value to life and society. If you allow, I can introduce you to thousands of entrepreneurs who have taken charge of their lives; over 3 million to be precise. The only thing they needed was the initial support and once Akhuwat provided them with it, they were able to set up their own small businesses. I believe in social entrepreneurship which helps us to think for others. 

Name any top 3 national problems of Pakistan? How the entire landscape could be changed by addressing those problems? 

Poverty, lack of Education, and deteriorating health. I believe if we are able to solve the issue of Poverty, the latter two will automatically be resolved as so many people in our country are unable to educate their children and have deteriorating health simply because they lack the means needed to prioritize those necessities. Once the poor man is able to educate his child, he will also have the means to provide nourishment. To fulfill our dream of a society free from poverty, providing education is the first step. Nowadays education has become so expensive that the common man cannot afford to put their children into school. To combat this problem, we have started Akhuwat University which is Pakistan’s first fee-free college where admissions are made based on merit and higher education is provided for free. 

How social entrepreneurs can bring socio-economic change to Pakistan?

By working not for the benefit of oneself but for the benefit of society which is termed as “social entrepreneurship”, in whatever capacity Allah has given to him/her. 

What does it take to launch and grow a social enterprise in Pakistan?

Faith, hard work, and integrity. 

On Current Issues

What are your initiatives on the recent novel Coronavirus?

Akhuwat has taken a couple of initiatives to support those suffering because of the Corona crisis. Our interventions include: 
1. Arranging free testing services for the deserving or poor.
2. Giving Ration packs and Financial support to the deserving/poor. 
3. Providing financial support to hospitals where facilities are inadequate. 
4. Distributing food to the deserving and poor via #Akhuwat Food Vans. 
5. Giving Interest-free consumption loans to those who would not like to opt for Zakat or Grant. 

What are the achievements till date regarding Coronavirus Outbreak?

We have been able to provide rations and meals to thousands of families on an ongoing basis. We have also provided financial support to hospitals who are in need. As of April 2020, Akhuwat has disbursed 25,000 Ration bags to 25,000 households in 93 cities and has provided 130,028 cooked meals to families residing in 70 cities. A total of PKR 3.0 million has been provided in Financial Assistance to 600 families. And these numbers are increasing every day. We have a far way to go and we will, InShaaAllah. 

How people are responding to the donations these days? Donation rate has been increased or stayed the same?

Pakistan is a resilient nation, that fights adversity with a lot of bravery the COVID-19 pandemic has received the same response from our nation. Alhamdulilah, people with more resources have been encouraged to help those in need at this moment. We have seen so many groups of individuals and organizations doing much-needed relief work across Pakistan. 

UN warns Pakistan could be the hardest hit by the economic fallout of pandemic. How we can respond to the situation? 

In the case of economic fallout, the Government alone will not be able to deal with the crisis. Those who are fortunate must provide support to those less fortunate. We need to support our small business owners who will be affected the most. 

As humans, any lessons we got during Coronavirus Outbreak?

We have to come together, think together, and act together to create sustainable pathways of recovery. Let me say that every test in our life makes us bitter or better, every problem comes to make us or break us. The choice is ours whether we become victims or victorious.