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Ethica Interviews Akhuwat, the World's First Completely Interest-Free Microfinance Program

DUBAI, UAE, Feb 19, 2013

Since starting a decade ago with a simple $100 loan, Akhuwat has dispersed $30 million to over 1 million people - completely free of interest. Ethica sat down with the inspiring Dr. Muhammad Amjad Saqib to learn more about his amazing story. The success of Akhuwat offers hope to a new generation of budding Islamic finance entrepreneurs seeking to replicate their microfinance model.

What makes Akhuwat's story especially captivating is that while it has never charged any interest, 99.8% of the loans to over 1 million people were paid back in full. While other microfinanciers - most notably Grameen - charge over 22% in interest, Akhuwat relies on 4 core principles: giving up interest, volunteerism, localization, and empowerment. Akhuwat's interview is now available on Ethica's website (click here to play) and should provide a starting point for those wanting to start their own interest-free microfinance project.

Dr. Saqib, founder of Akhuwat, said, "Financial institutions begin their activities on the basis of doubt, but we start our activities on the basis of trust. We are not seeing the person as a client or beneficiary, we are seeing him as a partner and are hoping to inculcate some of the highest moral, social and ethical values at the same time."

Ethica's spokesperson added, "The Islamic finance industry has become complacent. There has been much talk about moving away from Murabaha and similar instruments - however marginally Shariah-compliant they may be - but there has been little ground reality in harnessing the power of equity and gift-based instruments that are so central to a vibrant Islamic finance industry. Akhuwat offers the silver lining."

SOURCE: Ethica Institute of Islamic Finance

 

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