A microfinance pioneer from Pakistan was among the five recipients of this year's Ramon Magsaysay Award—regarded as the Asian version of the Nobel Prize—announced on Tuesday.
Muhammad Amjad Saqib (64) has built a reputation with Akhuwat, touted as a "first-of-its-kind" interest- and collateral-free microfinance programme. Akhuwat uses places of worship to disburse zero-interest loans, recording a phenomenal loan repayment rate of 99.9 per cent. Akhuwat has taken up a vast array of social support programmes in education, health services, 'clothes bank', anti-social discrimination and COVID-19 emergency aid.
The Magsaysay citation for Saqib notes he was being recognised “for his intelligence and compassion that enabled him to create the largest microfinance institution in Pakistan; his inspiring belief that human goodness and solidarity will find ways to eradicate poverty; and his determination to stay with a mission that has already helped millions of Pakistani families".
Akhuwat is regarded as the world's largest interest-free microfinance organisation. Akhuwat in Arabic means fraternity. According to Saqib, Akhuwat focuses on solidarity with the poor, brotherhood and sisterhood. A profile of Akhuwat by Vatican News in May 2020 noted the growth of the institution.
"What began with a tiny loan of around $100, Akhuwat has so far disbursed around $700 million to 3 million families in Pakistan. It has a network of some 850 branches in approximately 400 cities in the country. Currently, it has 1 million active borrowers," Vatican News reported.
The story behind the decision to start Akhuwat is touching. It started with Saqib's experience with a widow when he was a bureaucrat in Lahore in 2001.
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The woman had lost her husband and had four children. A profile of Saqib in Gulf News notes the woman "wanted a life of dignity and grace, without ever begging anyone for charity" and sought an interest-free loan.
Saqib arranged the equivalent of $100 for the woman. Th woman returned to see Saqib in his office six months later. "With the 10,000 rupees loan, she bought two sewing machines, and her journey of honest hard work began. Learning to stand on her own two strong feet, she looked after her children remarkably well; one of her daughters even got married. Dr Saqib had forgotten his little good deed but the grateful woman had not. She returned the money with a caveat that it should be loaned to someone else," Gulf News reported.
The meeting inspired Saqib to think about the world of microfinance, and Akhuwat was started a few months later.
Akhuwat claims it prefers to give loans to women and religious minorities as they face social discrimination.
