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Mohammad Amjad Saqib: Helping Pakistan’s Poor With Zero Interest Loans

By on September 11, 2021 0

GOD SEES PURITY IN OUR INTENTIONS: In addition to offering zero-interest loans to the poor, the Akhuwat microfinance program set up in 2001 by Dr. Muhammad Amjad Saqib provides assistance in education and health, a livelihood training and other outreach services for vulnerable sectors, including transgender people. . —PHOTO WITH THE AUTHORIZATION OF THE RAMON MAGSAYSAY AWARD FOUNDATION

MANILA, Philippines – Twenty years ago, a poor widow tried her luck to get a loan by approaching Mohammad Amjad Saqib.

Saqib, then managing director of the state-run Punjab Rural Support Program, still remembered how his investigation had unfolded in his office in Lahore, Pakistan.

“” If you give your sister a loan of $ 100, are you going to get $ 110 back? “He said, quoting the woman, converting the amount from rupees to dollars for easier illustration. “I said, ‘If I give my brother or sister $ 100, I’ll get $ 100 back. “

Islamic law prohibits interest on loans, but it was not just this religious injunction that shaped Saqib’s thinking on microfinance as a way to lift families out of poverty.

So her new “sister” that day left her office with a heavy load lifted from her chest, securing a loan she pledged to repay in six months. Saqib later learned that she bought two sewing machines with the money, earned enough to send her children to school, and generally banished hunger from her home.

She returned the $ 100 on time, now calling it “blessed money,” which she hoped she could lend immediately to someone in need.

Saqib said that meeting with the widow – a woman who kept her dignity and resolve not to beg despite her predicament – planted the seed of a personal mission that continued long after he left. Pakistani civil service.

Impact on millions

He is now highly regarded as the founder of Akhuwat, a non-profit microfinance organization whose impact on nearly five million people has received international acclaim, from Queen Elizabeth II to the Crown Prince of Dubai.

The final applause comes from the Philippines: Saqib is one of this year’s five winners of the Ramon Magsaysay Prize, the Asian equivalent of the Nobel Peace Prize.

The Ramon Magsaysay Award Foundation (RMAF) honors Saqib for his “intelligence and compassion which enabled him to establish the largest microfinance institution in Pakistan; his inspiring conviction that human kindness and solidarity will find ways to eradicate poverty; and her determination to stay with a mission that has already helped millions of Pakistani families.

Akhuwat operates on the basis of the Islamic principle of “Mawakhat”. Simply put, Saqib said, it was like having a loaf of bread but with the willingness to give half of it to another “rightful” owner – a person who does not have one.

Based in Lahore, Akhuwat’s offering of interest-free microcredit to the poor made it the first of its kind in Pakistan. Since its founding in 2001, it has disbursed 140 billion Pakistani rupees (approximately $ 900 million) in loans to 4.8 million beneficiaries, with a repayment rate of 99.9%.

Dr MuhammadAmjad Saqib (Photo by RMAF)

Expand programs

It has also expanded its social support programs by “adopting” neglected or underfunded public schools. He has established four colleges and will soon open a university for children from low-income families.

Its health services program has provided free treatment to around half a million patients with diabetes and hepatitis. Its “clothing bank” distributed some 3 million items of clothing to the needy.

Akhuwat, which means “brotherhood” in Urdu, also offers assistance, including psychosocial services, to transgender people.

When the coronavirus pandemic struck, Akhuwat was there for people who could not immediately receive help from the government, distributing food bags, masks and supplies to hospitals and offering psychological counseling.

All of these have made Akhuwat more than a moneylender.

“It is a movement to improve the conduct and character of the people. It is a transformation of the state of mind, an attempt to create a system of mutual support. We are different from conventional microfinance in that we don’t see microfinance as an industry or a business, ”he said in a recent interview hosted by RMAF.

Borrowers, he said, feel like “part of the family” and are part of a “virtuous cycle” of people paying next. Once they start paying off the loan, they see Akhuwat as “our organization” worthy of continued support, so they “won’t let it down,” he said.

It is therefore not surprising that Akhuwat’s repayment rate has remained high despite the pandemic, unlike other more “traditional” microfinance programs in Pakistan.

“If you trust them. . . ‘

Akhuwat also puts its beneficiaries in touch with partners “transmitters of skills” to help them make the most of their loans by learning a new trade. These partners, mostly entrepreneurs eager to share their knowledge and best practices, were once borrowers themselves.

“The whole system is based on two assumptions: that there is no shortage of people who want to give and that the poor are not beggars or thieves. If you trust them they will give you the money back… Maintaining a 99% payback validates our assumption that people are honest, ”Saqib said.

“Why should I assume someone on the street is lying to me, unless they prove it?” It is a kind of reform movement in which we want to revive the spirit of hope and confidence, ”he added.

In his view, Akhuwat’s success can be replicated in other countries, regardless of religion, “because he believes and is based on virtue. For someone to be willing to help someone and for someone to return the favor is virtue. We just need an institution that can galvanize the whole of philosophy.

“I remember that even changing a person’s life is the second to changing all of humanity. We shouldn’t be aiming for quantity. God sees purity in our intentions. If you have purity in your intention, you can improve a person’s life, ”Saqib said.

“Societies only prosper when there is love… The problem is that the rich live far from the poor. There are two types of companies in each company. One where the rich live and one where the poor live. They ignore each other, so we try to bridge the gap. “

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