Pakistan’s “Akhuwat” has the unique distinction of initiating and successfully managing the world’s largest microfinance and interest-free lending programme. Rs 150 billion has been issued thus far under this huge scheme through 4.4 million small loans. The recovery rate for these loans is an astounding 99.9 percent, according to Dr. Amjad Saqib, founder and CEO of Akhuwat Pakistan.
Addressing a special occasion at the Faisalabad Chamber of Commerce and Industry (FCCI), he stated that out of the total loan amount of Rs. 8.5 billion, Rs. 3.25 billion have been distributed through 3.25 lac loans in district Faisalabad, with a 100% recovery rate. He stated that these data clearly demonstrate that micro and small businesses can be operated without incurring interest, and that the assumption that individuals are unable to repay interest-free loans is completely ludicrous.
He explained that the fundamental philosophy of “Akhuwat” is based on “Mawakhat-e-Madina” (Muslim brotherhood). “This system was launched about 20 years ago, and we have proved beyond any doubt that interest is not prerequisite for economic stability and it could also sustain and grow with interest free loans” he said, adding that the Pakistani government has now recognised interest-free loans as the most viable banking tool in Pakistan.
According to Finance Minister Shaukat Tarin’s recent budget speech, the government wants to grant interest-free loans up to Rs. 0.5 million to vulnerable groups, including farmers. Dr. Amjad stated that because Faisalabad is recognised for its entrepreneurial spirit, FCCI should propose at least one lac potential, honest, and serious individuals for Akhuwat to arrange interest-free loans to enable them to start their own enterprises. “These persons would not only earn their own respectable livelihood but also contribute their productive role in the overall national economy” he continued.