By Mohd Naushad Khan

The Nobel Peace Prize nomination of Dr. Amjad Saqib, a Pakistani microfinance pioneer, is encouraging for all those who are heading microfinance ventures in their countries for the welfare of people. Experts in microfinance believe that in the process, it is most likely to gain acceptance as a global phenomenon, thus transforming the lives of the needy and marginalised in various parts of the world.  

Dr Amjad Saquib, one of the 343 individuals nominated for the Nobel Peace Prize 2022, is the founder of Akhuwat, which is Pakistan’s largest interest-free microfinance programme. On his nomination, Dr Amjad said, “My services are beyond such award, and it is only for the sake of Allah.” Dr Amjad has received 2021 Ramon Magsaysay Award which is considered Asian Nobel Prize for his instrumental role in alleviating poverty and providing helping hands for millions to transform their lives.

Akhuwat Islamic Microfinance (AIM) aims to alleviate poverty by creating a system based on mutual support in society. This system works through establishing centres in religious places, fostering and harnessing the spirit of volunteerism, and aspiring to transform its borrowers into agents of change. As per figures available, Akhuwat so far has disbursed over 4.2 million interest-free loans amounting to PKR 128 billion ($805 million), helping 3 million families across Pakistan. With more than 800 branches in over 400 cities across Pakistan, AIM is considered the largest interest-free microfinance programme in the world.

Akhuwat is a not-for-profit organisation founded on the Islamic principle of Mawakhat or solidarity in 2001. The concept of Mawakhat predates to 622 CE when Prophet Muhammad ﷺ urged the residents of Madinah (Ansars) to share half of their belongings with the Muhajirs (migrants) who were forced to flee persecution and migrated from Makkah to Madinah.

Drawing inspiration from the generosity displayed by the Ansars, Akhuwat believes that if the same approach, where one affluent family embraces a less fortunate one is adopted today, inequality will be eradicated from the world.

On Dr Saquib’s nomination, another pioneer of microfinance in India and founder of Sahulat Microfinance, Mr Arshad Ajmal said, “It is welcome news and I am highly appreciative of the work Dr Amjad Saquib is doing through Akhuwat and his overall contribution towards social welfare. I am in good touch with him for more than a decade or so.”

He added, “In the field of microfinance, Muhammad Yunus sahib has already received Nobel Peace Prize for his Grameen Model which is a purely commercial and viable project for the poor. The basic idea was that the poorer are also bankable. Earlier, the concept of bank was that the poorer are not bankable. There are two things: one is they don’t have the collateral and the size is too small and therefore the cost will be too high. Muhammad Yunus sahib challenged it and proved to the entire world and the whole world recognised that the poorer are bankable and physical collateral is not necessary.”

While comparing Grameem Model with Akhuwat, Mr Ajmal said, “The work of Amjad Saquib is somewhat different from the model concept of Nobel Laureate Muhammad Yunus sahib. It is not a commercial venture. It is viable and efficient. Dr Saquib’s venture is based on a religious concept and its dimension is very much moral. There are two instances; one, he has derived from Islamic history (Islamic principle of Mawakhat) and from there he founded Akhuwat, and the other is that it is based on his personal experience.”                              

“As he was a civil servant and was working with the rural development, he had the basic idea of the situation prevalent on the ground. There are two stories which he used to narrate often: one, A woman came to meet him and said that her husband had expired.  She had children and she didn’t want them to be indulged in wrongdoings. ‘Therefore, please give me Rs 10,000 Qarz Hasan (without interest).’ Dr Amjad gave the money from his pocket. It happened before the story of Akhuwat began. In the meantime he forgot about it but after six months the lady once again came and she not only returned Rs 10,000 but also said that her children are now going to school, and one daughter got married. He then multiplied and worked on it which eventually led to the foundation of Akhuwat,” he said. 

On the basic difference between the concept of Akhuwat and Sahulat, Mr Ajmal said, “The microfinance model, Sahulat Microfinance in India is a little different from the model of Akhuwat. The money that comes to Amjad Saheb is in the form of charity but we in the Sahulat create funds from the deposits. When I met him in an international seminar, he asked me to explain the difference between his model and Sahulat. I explained to him a few differences which he agreed upon. The money we received is a liability and for Akhuwat it is a charity.”

On the need of Akhuwat model in India, he said, “I personally believe that in India too work should be done on the model of Akhuwat and there is plenty of scope for that. Both models of Akhuwat and Sahulat can complement each other for social welfare. In India too there is plenty of charity and the need is that it should be institutionalised for the sake of public welfare. Akhuwat also receives funding from the government. In India too there are various kinds of government funding for people’s welfare. Akhuwat as an idea needs to be explored in India for the sake of welfare of people.”                                               

While clarifying the concept of Akhuwat and Sahulat, he said, “The best part of Akhuwat is that it can work with the people even below subsistence level but under Sahulat it works with the people above subsistence level. Akhuwat has 800 branches in Pakistan and their assets are 155 billion dollars. The size of Akhuwat is very big as compared to Sahulat’s. The other difference is that Akhuwat is not only confined to microfinance like Sahulat. The manner in which Dr Saquib has organised voluntarism is exemplary. He uses religious places like Masjid, Mandir, Churches and Gurdwara to disburse loan. His idea of working is inclusiveness which the entire world needs to learn and emulate for the welfare of people and the nation at large.” 

On the impact of this nomination to the multidimensional concept of microfinance, he said, “The nomination of Amjad Saquib, microfinance pioneer for the Nobel Peace Prize has itself strengthened the multidimensional concept of microfinance and it is likely to push the idea of microfinance globally. If he gets Nobel Peace Prize, which we all hope so, it will further strengthened the idea of microfinance in various parts of the world. Akhuwat apart from microfinance is also serving the poor through his other ventures like Akhuwat Islamic Microfinance, Akhuwat Education Services, Khwajasira Support Program, Akhuwat Clothes Bank Akhuwat Health Services and Low Cost Housing Project.”

On the journey of Sahulat Microfinance so far, Mr Ajmal said, “Sahulat Microfinance Society, since its inception in 2010, has registered significant growth vertically and horizontally. It is now providing helping hand for and transforming the lives of 20,00,000 families across the length and breadth of India. The institution is playing a meaningful role in the overall national goal of financial inclusion.”

He added, “From 11 branches of affiliated credit cooperative societies in the year 2012-13, it has now increased to 87 branches in 2021-22. In terms of growth in membership, it has increased from 7,215 members in 2012-13 to 2,21,657 members in 2021-22.  It has registered growth in deposit balance from 3.19 crores in 2012-2013 to 198 crores in 2021-22. However, growth in loan disbursement has been from 3.73 crores to 318 crores in 2021-22.  Also, there has been growth in loan beneficiaries from 1,639 in 2012-13 to 42,405 in 2021-22.”

According to him, “The definition of Interest-Free Microfinance through cooperatives derived by Sahulat is: A Cooperative Credit Society is created by members for pooling their funds and creating loanable funds therefrom for addressing their liquidity demands from time to time, mutually sharing the operational cost and owing the benefit and risk of operations.”

On the post-pandemic challenges, he said, microfinance has to play its role to meet the challenges. Some recent guidelines from the RBI have helped the microfinance ventures in one way or the other. Microfinance institutions should get more support from the government institutions in order to meet the post-pandemic challenges effectively and meaningfully.

“On more interesting point Dr Amjad told me during our meeting that Akhuwat, in collaboration with Fountain House launched the Akhuwat Khwajasira Support Program in 2011. According to him, when he asked them what they want, they replied Combs because their hair was very dirty as they had not washed it for long. He then distributed more than 2 lakh combs and today there are 2000 registered Khwajasira (third gender) getting help and assistance from Akhuwat. Dr Amjad’s model of microfinance is very comprehensive and it is not commercial but based on charity.

Dr Amjad also used to tell another story very often. A man took Rs 10,000 from him. After some time he was earning Rs 1000 daily as profit. One day the man returned to him and said, ‘I am now earning Rs 1000 daily from the money he had received from you. Now let me know what I can do for you,’ which to him was very surprising at that point of time. He asked the man to give Rs 1 daily to Akhuwat and now such accumulated money from such persons has come to about 10 crores.

“I will be personally very happy if he gets Nobel Peace Prize. Amjad Saquib is a very competent man and he has solutions for every problem. He is visionary; he believes in action and not simply words. My first meeting with him was during an international conference in Dubai. Long ago he had sent me a PDF file of his book written on the Journey of Akhuwat on my old personal mail,” he said.             

“A notable personality in the field of microfinance in the world, Malcolm Harper published a study on the work done in microfinance of 15 countries. In that he had also studied Al-Khair from India and Akhuwat from Pakistan. I met Malcolm during his visit to India,” said Ajmal.

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