OOne of the five winners of this year’s Ramon Magsaysay Prizes – known as the Asia Nobel Prizes – is Dr Muhammad Amjad Saquib, founder of Pakistan’s largest community development network, Akhuwat, based on Islamic principles. of sharing and fraternity.
Launched in 2001, hundreds of thousands of poor families have been supported through Akhuwat’s interest-free microfinance loans. Islamic law prohibits interest on loans, but Islamic teachings encourage followers to set aside part of their wealth to help the needy finance this model.
“It’s definitely a model of Islamic development,” says Fatima Shah, a Pakistani international development professional. “Akhuwat’s interest-free financial model, where loans are based on trust and encourage group lending options to foster a sense of community; is fundamentally rooted in core Islamic values.
Akhuwat’s core program, Akhuwat Islamic Microfinance (AIM), provides interest-free loans to disadvantaged people to enable them to create sustainable pathways out of poverty. With over 800 branches in over 400 cities across Pakistan, AIM is the world’s largest interest-free microfinance program.
Dr. Saquib was intellectually and professionally well prepared for this role when he embarked on the creation of Akhuwat. After graduating from King Edward Medical College in Lahore, he obtained a Masters of Public Administration from American University Washington with a Hubert Humphries Fellowship. From 1985 to 2003 he served in the Pakistan Civil Service where he realized that government programs were not designed to help the poor, especially women – even when they claim to do so. .
Akhuwat “adopted” hundreds of neglected and non-functioning public schools and established four residential colleges (including one for women), and soon a university, for poor and deserving students. Established in 2015, Akhuwat College is a residential college that caters to students from low-income households who, despite their talent and desire to continue their education, cannot do so due to financial constraints. Their learning centers provide education and vocational training for children of unknown parents, who often find themselves in back streets plagued by drugs, prostitution and violence.
The organization promotes women’s education, and Akhuwat College for Women and its website claim its philosophy is based on “the firm belief that no nation can progress without investing in women’s education.” Located in Chakwal, Akhuwat College for Women is a residential campus, housing women from across the country with young women who receive merit-based admissions.
Akhuwat runs a health services program, helping hundreds of thousands of patients; a “clothing bank” which distributed over three million items of clothing to the needy; and an economic, health and psychosocial services program for the discriminated Khwajasira (transgender) community.
In nominating Dr Saquib to receive the Ramon Magsaysay Award 2021, the Board of Directors stated in the quote that they “recognize the intelligence and compassion that has enabled them 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.
Dr Saqib dedicated this award to the poor beneficiaries of Akhuwat and the Pakistani nation. He said the award is an endorsement of Akhuwat, an interest-free loan model, and a tribute to the compassion and integrity of his nation. In a tweet, Pakistani Prime Minister Imran Khan congratulated Dr Saquib on winning “Asia’s highest honor” and added: “We are proud of his achievement as we move forward in building a state. -providence based on the Riyasat-e-Madina model.
“Akhuwat in its entirety – its name, its central philosophy, its slogan Iman-Ihsan-Ikhlas (faith-goodness-sincerity), and its financial approach is designed on Islamic social and financial principles. Akhuwat is derived from Mawakhaa’t which means brotherhood, a principle that defined how the Prophet catalyzed the integration of immigrants from Mecca into the social and financial fabric of Yathrib (Medina), ”Fatima told IDN in an interview.
Akhuwat’s success is another example of how the global banking model based on interest payments fueling the system is not serving the poor. “It’s a phenomenal story, even in pure numbers; starting with a single loan of less than Pakistani Rs. 200,000 (about US $ 3,000) in 2001, to over Pakistani Rs. 140 billion interest-free loans that continue to help over 20 million people. Amjad Saqib has managed to demonstrate his empathy and selflessness in a cyclical social enterprise. Her philosophy is not just to do yourself good, but to encourage and help others to join hands in helping, Fatima adds.
Akhuwat uses places of worship for loan disbursements, which saves costs and also encourages volunteerism among staff and clients. It aims to turn borrowers into donors.
The Akhuwat model is sometimes compared to the famous Grameen Bank model of Professor Muhammad Yunus from the predominantly Muslim South Asian nation of Bangladesh. But the Grameen model charges interest on its microloans. There are similarities between the two models, says Dr Faiz Shah, director of the Yunus Center at the Asian Institute of Technology in Bangkok. “The primary function of the two organizations is to provide access to finance through social capital and social guarantees,” he adds, “lending to the unbankable is the similarity.”
Dr Faiz points out that Professor Yunus never claimed that the Grameen Bank is an Islamic model. “It’s just a loan program that is sometimes seen as a savings and loan program. It is motivated by a commitment to social development. The Grameen principle is that anyone who subscribes to a Grameen program would contribute to a community or national development program, ”he told IDN. “Akhuwat is simply motivated by a motivation to tap into a pool of Islamic welfare funding that is spelled out in the principles of the Islamic faith … motivated by the principle of brotherhood in Islam.”
Today, Akhuwat is the largest microfinance institution in Pakistan, providing a package of loans to the poor. It distributed 4.8 million interest-free loans worth the equivalent of US $ 900 million, benefiting three million families, with a remarkable loan repayment rate of 99.9%. During the Covid-19 pandemic, Akhuwat responded with emergency loans and grants, food relief and other assistance in more than 100 cities in Pakistan.
Dr Faiz, who is Pakistani, points out that it is important to stress that one of the tenets on the five pillars of Islam is charity, in which one-fortieth of all that one earns must be spent to help another human go through a difficult time. “The state can administer this, but it is also a personal obligation for Muslims,” he says.
“Muslims can do this in a number of ways, and this percentage should be deducted from having everything owned by a Muslim and spent on community development or helping those in need,” says Dr Faiz. “You could say that Akhuwat’s inspiration is very firmly rooted in the model of Islamic development, (adapted to) modern times, in its modern implementation or its modern interpretation of the application.” (IDN-InDepthNews)