Akhuwat has reached more than 1.2 billion rupees in micro-loans disbursement      Akhuwat's 55th Branch at Muzafargarh launched on 28th May, 2011     Google Inc. Charitable Giving Fund of Tides Foundation has supported Akhuwat for its relief efforts in flood hit areas of Pakistan      Akhuwat is rehabilitating 10,000 flood affected families of Distt. Rajanpur      Presence in 34 cities      Model replicated by over 10 NGOs      Akhuwat working in collaboration with PUKAAR in Nowshera, KPK

Core Features

During its initial years, Akhuwat revised and refined its operational strategy to identify four core principles which reflect its underlying philosophy and overarching aims. These four core principles now stand as the defining features of the Akhuwat model.

1. Interest Free Loans

Akhuwat provides interest free loans to the economically poor so that they may acquire a sustainable livelihood.

Interest free loans have formed the cornerstone of Akhuwat’s operation since its inception. It is a derivate of the practice of Qarz-e-Hassan which keeping in line with the teachings of Islam, is an interest free loan offered to those in need. In addition to ideological reasons, high interest rates may contribute to exacerbating the plight of the poor as recent global evidence has demonstrated. For Akhuwat, by using money to earn money, not only does wealth remain concentrated in the hands of a few but the direction of financial flows remains from those who have little to those who have more. In keeping with the principles of equity and social justice, burdening the poor with exorbitant interest rates is also viewed as undermining the overarching goal of poverty alleviation.

2. Use of Religious Places

The Akhuwat Model institutionalizes the use of local religious places, for example mosques and churches, as centers for loan disbursements and avenues for community participation.

Historically religious places have played a key role as an institution for social and economic development, a role that Akhuwat seeks to revitalize. Akhuwat achieves this by employing local mosque and church infrastructure as centers for loan disbursements and avenues for community participation. Use of the vast existing infrastructure of religious places allows Akhuwat to minimize operational costs, have extensive outreach and function efficiently. Using religious places as venues for loan disbursements also have additional advantages; increased transparency and accountability, awareness and publicity of Akhuwat’s campaign and the creation of a sense of good will amongst the community.

3. Spirit of Volunteerism

Akhuwat draws on and fosters a spirit of volunteerism in society for it deems volunteerism to be a pillar of a system based on mutual support.

The operation of Akhuwat has been based on the concept of a social contract; it is a pact which emphasizes the duty of those who have resources towards those who do not. The duty may be manifested in contributing one’s resources, knowledge, skills, energy or time; everyone is encouraged to play their role in efforts at poverty alleviation. Akhuwat is supported by an extensive network of volunteers from all walks of life who contribute their services from time to time. It believes that an ideal social enterprise employs a mixture of volunteerism and necessary compensation; it preaches the same principle to its employees and encourages them to contribute to this brotherhood beyond what is dictated by their formal contract. By fostering a spirit of volunteerism, Akhuwat strives to mobilize all members of the society to play their part in poverty alleviation.

4. Transforming Borrowers into Donors

Akhuwat encourages its borrowers to donate to Akhuwat’s program and so help their brethren once the borrowers themselves have gained enough economic stability. However these donations are neither compulsory nor have any bearing on the borrower’s credit profile.

Originally the Member Donation Program [MDP] was not part of Akhuwat’s operation however the idea evolved after a borrower, who had successfully managed to secure a sustainable livelihood for himself, insisted on contributing to Akhuwat so that the organization could continue to help others like him. His generosity and tenacity struck the Akhuwat staff as an exemplary realization of the culture which the organization had been trying to promote. Efforts at poverty eradication are not manifested in improved income levels alone but they must seek to inspire a change in society. The transformation of borrowers into donors is one indicator of the change Akhuwat had envisaged. Over time this practice has institutionalized the culture under the Member Donation Program. However while borrowers are encouraged to join the program, their contributions have no impact on their loan approvals nor are the contributions compulsory or enforced.

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