Interest-free microfinance in Pakistan

Sitting among a few enthusiastic friends at a dinner almost 12 years back, I first heard about interest-free microfinance. That day it was just a topic of discussion, I had never thought that an organization promoting this concept could come into being.

The very first loan of PKR 10,000 ($100) was given to a widow named Sakina Bibi, who was living in one of the slum areas of Lahore and striving to earn a decent living through honorable means. She was neither a beggar nor was she looking for charity; she was only seeking a helping hand. By dispensing and receiving repayment on that loan within a period of six months, the group of friends became convinced of the viability of their venture into interest-free microfinance and named it “Akhuwat,” which literally means brotherhood. The concept that started with Sakina Bibi has now reached more than 400,000 families in Pakistan, with PKR 4 billion in loans.

Since that day, I made up my mind to be an integral part of this organization and that is why I am still engaged with Akhuwat as a Chief Coordinator, where I develop its fundraising policies, establish bonds between donors and the organization, and spread Akhuwat’s unique concept to the entire world.

One of Akhuwat’s primary deviations from conventional microfinance is that it charges no interest rates. Akhuwat has sought to base its movement on the principles of Qarz-e-Hassn found in the Islamic tradition, which entails helping someone in need with interest-free loans, a practice favored over charity and aid. While drawing on the tradition of Qarz-e-Hassn, Akhuwat has incorporated many of the best practices and lessons learned from conventional microfinance movements from across the globe as well.

My journey with Akhuwat has been enhanced through Acumen’s Pakistan Regional Fellows program. The program allowed me to improve my leadership qualities and explore new opportunities that would benefit Akhuwat. The seminars and network of other social entrepreneurs and change-makers have provided me the courage and determination to tackle the tough issues facing Pakistan without any fear of losing hope.

I really feel honored and proud to be a Fellow at Acumen. I’m confident that this experience will improve my ability to deliver social impact through interest-free microfinance at Akhuwat.

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