Mawakhat: Fueling Interest-free Microfinance
Mawakhat is a revolution that a society direly needs to expedite its journey toward social and economic equality. The spirit of mawakhat comes into existence when the privileged chunk of society lends a helping hand to uplift the underprivileged. It begins from the heart and it connects the hearts. This idea of solidarity and brotherhood is the first step in supporting the marginalized community to attain financial independence. The ideal way to make it possible is through microfinancing the poverty-hit segments. The interest-free microfinance model is an even more powerful way of empowering these hopeful souls.
Learning from the Model of Mawakhat-e-Madina
Mawakhat is a divine concept that Muslims practiced at the time of hijrah-e-Madina. To escape the persecution of the Quraish, they (Muhajirin) migrated to a peaceful land where they arrived with penniless pockets and hopeless hearts. Little did they know that the hearts of their hosts (Ansaar) in Madina are ready to set an unexcelled example of mawakhat. As a brotherly gesture, the hosts divided their lands, assets, and every belonging into half to share them with the incoming migrants from Makkah. This unconditional sharing of one’s belongings to fulfill the needs of the other is mawakhat. Human emotions of solidarity carry enough power to revolutionize the socio-economic image of society- Mawakhat-e-Madina is an example and an inspiration.
The Next Step: Help Them Escape the Noose of Poverty
To bridge the gap between the rich and the poor, around two decades ago, Akhuwat initiated a mission to spread the word of mawakhat in the hearts of the privileged class of the country. The idea was not to give charity but to uplift the economic situation of the poverty-stricken.
Any society that imitates the philosophy of mawakhat, is on the way to prosperity. Akhuwat implements this philosophy of mawakhat into its model of giving interest-free loans, and here is how they have achieved major milestones against the menace of poverty.
- Develop a system to collect borrower data making sure that they are:
- Trustworthy
- Have the ability to run a small business through loaned amount and return it in the given time frame.
- Develop a system to ensure a maximum recovery rate.
- Motivate the borrowers into becoming lenders when they become financially stable.
- Keep spreading the word consistently throughout the whole country.
And, here is what they have achieved so far:
– 5.4 million Interest-free MicroFinance beneficiaries across Pakistan who have fully availed of the loans into their financial benefits.
– PKR 180 Billion have been disbursed in lieu of interest-free microfinance loans to the needy.
– A network of 850+ branches in about 400+ cities across Pakistan.
This amalgamation of mawakhat with interest-free microfinancing is a true depiction of a winning battle against poverty in a society. It proves that the 78.1% residing above the poverty line can mutually support the other 21.9% lying below. The process although gradual but carries the potential worth causing a revolution. Not to forget, it all starts with mawakhat.