Islamic Micro

Housing Finance –

Akhuwat Model

May 29, 2015

Dr. Muhammad Amjad Saqib

Chairman - Akhuwat

Section I

Akhuwat – an Organization for Interest Free Microfinance

Akhuwat

Akhuwat was established in 2001 with

the objective of providing interest free

micro-credit to the poor so as to start a

business, come out of poverty and

enhance their standard of living.

‘Akhuwat’ means brotherhood

or solidarity with the poor and less

advantaged.

VisionA poverty free society built on the principles of compassion and equity.

MissionTo alleviate poverty by empowering socially and economically marginalized families through interest free microfinance and harnessing entrepreneurial potential, capacity building and social guidance.

How Akhuwat is different?

Microfinance is not a new strategy but Akhuwat is different because of;

Interest-free loans – Qard e Hasan Use of Religious places Spirit of Volunteerism Transforming Borrowers into Donors

Map of Pakistan

Achievements Total amount disbursed: PKR 16

billion Total borrowers :

850,000 Offices in Pakistan: 350 Recovery Rate :

99.8 %

Staff : 2,000+

Cities: 210

A new model in the world of MF

Included in the syllabi of two Universities

BEYOND MICROFINANCE

1. Akhuwat Microfinance (Qard-e-Hasan)

2. Akhuwat Health Services

3. Akhuwat Educational Assistance Program

4. Akhuwat Volunteers

5. Akhuwat Khuwajasira Support Program

6. Akhuwat Clothes Bank

7. Akhuwat Dreams

8. Akhuwat University

9. Akhuwat Interest Free Housing Loan Programme

Section II

Interest Free Housing Loan Programme

in collaboration with

Al-Noor Umar Welfare Trust

Silent Features

Interest Free Housing Loans for construction, renovation and repair of rooms, roofs, walls etc.

Loan ranges from Rs. 30,000/- to Rs. 100,000/- Repayment within two to three years Locality – Poor Areas / Slums Incremental Loaning

Purpose is to provide Housing Facility &

security to the poor

Improve Standard of Living

Eligibility Criteria

Borrower owns a plot not exceeding 4 Marlas. Family income does not exceed Rs. 20,000/- Does not own another house Preferably a previous borrower of Akhuwat Good social capital Has regular source of income

Progress Report

Progress Indicator Till April 2015

Total Amount Disbursed Rs. 46 Million

Total No. of Loans Disbursed 723

Active Loans 227

Outstanding Loan Portfolio Rs. 36 Million

Recovery Rate 100%

Name Yasmeen Jameel

1st Loan Rs. 75,000/-

Disbursement Date June 2013

2nd Loan Rs. 100,000/-

Disbursement Date Nov 2014

Purpose Construction & Renovation

Name Anees Akhtar

1st Loan Rs. 70,000/-

Disbursement Date

June 2012

2nd Loan Rs. 100,000/-

Disbursement Date

Nov 2014

Purpose Construction

Name Shoukat Ali

1st Loan Rs. 70,000/-

Disbursement Date

June 2012

2nd Loan Rs. 100,000/-

Disbursement Date

Feb 2015

Purpose Full House

Name Iftikhar Ahmed

Loan Rs. 70,000/-

Disbursement Date

February 2015

Purpose Roof and Plaster

Name Muhammad Sadar

Loan Rs. 80,000/-

Disbursement Date

Nov 2014

Purpose Full Room

Name Mansoor Elahi

Loan Rs. 60,000/-

Disbursement Date

August, 2014

Purpose Full Kitchen

Name Muhammad Waseem

Loan Rs. 80,000/-

Disbursement Date

Dec 2013

Purpose Finishing of House

Name Muhammad Ibrar

Loan Rs. 80,000/-

Disbursement Date

December 2013

Purpose External Walls & Door

Name Riffat Shaheen

Loan Rs. 100,000/-

Disbursement Date May 2015

Purpose Roof of Kitchen & Doors

Name Salman Shaukat

Loan Rs. 80,000/-

Disbursement Date

Feb 2015

Purpose Roof of a Room

Section III

A New Loan Product for Mithi District, Sindh

Context

Mithi is the Headquarter of

Tharparkar District in the Sindh

An estimated population of 1,481,643 (2012)

Estimated Households are 211,000 44 union councils & 2,357 villages

Literacy Rate 18.32% for men and

6.91% for women

One of the Priority Area

During recent visit and Rapid Need Assessment to District Mithi and adjourning area, Akhuwat Team observed inadequacy of Housing units.

A typical house consisting of 2 Rooms plus Bathroom costs around

PKR.100,000

Solution

Creation of initial fund of PKR. 100 Million that will revolve as

Interest Free Loan to eligible poorest household to construct their houses.

Eligibility Criteria

Those household will be selected who

fall in the range of 0 – 20 on poverty score card

Also have the capacity to return in

easy installments in 2 – 3 year’s time.

Either the family does not have a house or the house is in a dilapidated condition.

ProcessSelection of 10

to 20 settlements, within close proximity

Identification of Eligible

Households from these settlements

Agreement with the

Households

Designing of the House as per available land and cultural environment

Release of First

Installment to Family

Technical Support and Supervision

of construction

Release of 2nd Installment

Completion of the

construction

Revolving Funds

A fund of PKR. 100 Million will be raised from the philanthropist / institutional donors.

The construction will start once PKR. 10 Million is available in the fund. (PKR. 5.1 Million is available)

Funds will be utilized through interest free loan scheme to the owner of such houses.

It is expected by revolving this amount

around 1,500 units will be built every year

Implementation

The fund will be raised and managed by Akhuwat

The process of identification of eligible candidates, technical support in design and construction may be out-sourced to a third party familiar with socio-economic conditions of the locality.

Operational Cost

Operational Cost is expected to be

10% of the total amount This amount will be raised separate

from the revolving fund. The households may also contribute in this.

Replication and Expansion

Once the program is implemented successfully a review and impact assessment will be conducted within

One Year, and the program will be replicated in other parts of the this districts and neighboring districts.

Loans Advanced so far…

Please contact us

www.akhuwat.org.pk

19 Civic Center Sector A-2, Township, Lahore

Phone # 042-35122743, 35112146-47

amjadsaqib1@gmail.com