By Zofeen Ebrahim
When Shamim Akhtar’s 20-year-old daughter developed an acute case of ulcers, last year, and had to be hospitalised, she had little choice but to approach a neighbourhood moneylender and borrow Rs 20,000 (330 US dollars). Akhtar’s husband was unemployed at that time.

At 200 percent interest, it meant that she had to pay Rs 2,000 (30 dollars) to the moneylender every month. In 18 months she had paid Rs 36,000 (600 dollars) as interest, but the principal amount she owed the moneylender remained unchanged. A couple of months ago, she heard of ‘Akhuwat’ (brotherhood), a Lahore- based, non-profit organisation that gives out interest-free loans to the poorest of the poor, and even settles the outstanding amount. Akhuwat calls it ”liberation loans”.

Now Akhtar is one of 400 people, mainly women, that Akhuwat has liberated from the clutches of loan sharks. ”One of their managers came with me to the moneylender and paid him off at one go. I’ve never felt so relieved,” she says, ”I now pay Akhuwat Rs 1,000 (16 dollars) every month and will be able to clear my loan in 20 months.”

”We really target the poorest of the poor, the ones who cannot even access microcredit,” says Amjad Saqib, the executive director.

Akhuwat’s philosophy is based on Islamic teachings–the principle of ‘Qarze-e-Hasna’ or helping someone in need with interest-free loans, which are preferred over charity.

”Most microcredit professionals regard Muhammad Yunus as the brain behind microcredit; we at Akhuwat believe this practice to be 1400 years old, from the time of Prophet Mohammad who inculcated the spirit of brotherhood — that poverty can be eliminated if we are willing to share our resources with the needy,” he explains.

Grameen Bank, the microcredit organisation that Yunus founded in his native Bangladesh in 1970s, created banking history by making small loans to the impoverished without asking for collateral but instead, reposing faith in the ability and willingness of the poor to repay their debts.

Where does Akhuwat raise its funds from? From Pakistan, says Saqib with pride. Unlike most non-governmental organisations (NGOs) that depend on international funding, it taps the spirit of volunteerism and tradition of giving that is central to Islam, he explains.

A national survey of individual acts of charity conducted by the Pakistan Centre of Philanthropy revealed that ”an equivalent of Rs 70 billion (1.1 billion dollars) in monetary donations, volunteer time and gifts in kind were given out in 1998,” pointed out Saqib.

From a start-up donation of Rs 10,000 (167 dollars), Akhuwat’s kitty had swelled to Rs 70 million (1.1 million dollars) in just five years, with even Pakistan President Gen. Pervez Musharraf contributing Rs 200,000 (3,300 dollars and his mother another Rs 100,000 (1,670 dollars). The Punjab governor has also contributed generously.

”We’ve really never had to worry about getting the money, it just comes,” says Saqib. ”Anyone can become a life member by donating a sum of Rs 10,000 (160 dollars). This amount is credited for one year, returned to the credit pool and lent again, and the donor this way saves many families from abject poverty by just this initial amount.”

He is convinced that Akhuwat’s philosophy is a solution to poverty alleviation. Most micro-finance institutions (MFIs) charge at least 20 percent interest, which necessarily excludes the ‘dirt poor’. ”Ours is an indigenous model, a blend of volunteerism and necessary compensation…all one needs is the will to help the poor,” he asserts.

For now, the Rawalpindi Chamber of Commerce and Industry, inspired by Akhuwat, has said it will start its own loan programme by March, while in Peshawar, capital of the North West Frontier Province, another organisation has already begun lending to the poor without interest. In Multan, meanwhile, a church-supported initiative was to take off.

All eight Akhuwat branches function from within the premises of mosques. According to Saqib, the decision was deliberate. ”For far too long, we limited the use of mosques to just prayer. In between, they are desolate. With our offices in mosques, we have saved tremendously on operational costs. We don’t pay rent or utility bills,” he explains.

While Pakistan’s mosques are mainly male spaces, half of the organisation’s beneficiaries are women, and quite a few of them non- Muslims who face no discrimination. ”Our only criterion is they be poor,” says Saqib.

Thanks to two loans from Akhuwat, Ayub Masih, a Christian wage-worker, now has a vegetable cart. Very soon, he plans to apply for a bigger loan of Rs 20,000 (320 dollars) to start a PCO, a public phone booth. ”The fights at home have stopped,” he says cheerfully, while admitting: ”I was a bit reluctant to visit a mosque, although I’ve been coming to the dargah of Shah Jamal (Sufi saint revered by people of all religions) since I was a child.”

Liaquat Ali, a young tailor, believes the loans from Akhuwat are lucky. ”It has helped me get back on my feet and feed my kids… brought me luck as my business has prospered. It has to do with the holiness of the place,” he asserts. Previously, working on his own, he tailored only one shalwar kameez (traditional shirt and loose trousers worn by both men and women) a day. Now, with two helpers and two more machines he makes eight to nine sets daily.

According to Aftab Hussain Awan of Akhuwat, loans are given for enterprise development like Liaquat Ali’s or education, emergency (accidents or medical care), marriage (only very small amounts for the dowry of daughters or for a simple feast for wedding guests) and freeing borrowers from moneylenders.

In addition, Akhuwat gives alternate livelihood loans to sex workers–a first in Pakistan. In Lahore’s famous red light district of Heera Mandi, 25 women, either old or physically unfit, have been provided money to set up small kiosks that sell cigarettes or candy and betel nut sachets, or food stalls.

The women are identified by ‘Sheed’, an NGO that helps sex workers. ”This is one of the poorest areas of Lahore with dismal social and economic indicators and where women’s rights are completely trampled and run over,” explains Lubna Tayyab, general secretary, of Sheed. Indeed, Akhuwat’s spirit of brotherhood is all encompassing.