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Fighting Money Lenders through Microfinance

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Informal Moneylending and its Consequences in Pakistan

Poor people in Pakistan who need quick cash can become victims of loan sharks who take advantage of people’s desperation by granting them loans at exorbitant interest rates. The culture of borrowing from informal moneylenders who are known as Baniyas is prevalent in this impoverished country. Research indicates that about one-fifth of all households are indebted to moneylenders. Even more concerning is that 30% of over-indebted households are spending more than 100% of their income on loan repayments.

More than 100%! If all or a big proportion of income is spent on just loan repayments, this leaves no money for daily living. How do these people survive? And how do they get into these situations?

Borrowing from Baniyas – A Solution that’s a Bigger Problem

Poor people who have no other means of getting funds feel that they have no other option except to borrow from unscrupulous moneylenders. Interest repayments which never seem to come to an end imprison them in a cycle of ongoing debt, leaving them in a worse position than before they had taken the loan. Even after many years, the principal amount (the initial capital borrowed) is untouched and the loan which was meant to help them becomes a yoke around their necks.

This is yet another example of the exploitation of poor people. The most obvious impact is financial – many borrowers report that they actually become poorer, having to pay interest for years. But borrowing from Baniyas is detrimental on so many other levels too.

The Negative Implications of Borrowing from Moneylenders

Borrowing from loan sharks is often a fate worse than death for poor families, leading to forced labour and slavery. Here are some of the realities these families face:

  • Using their limited resources/income to pay off loans may result in removing children from school. It negatively impacts the ability to pay for medical care and results in poor diets for the family, with breadwinners having to work extra hours or being forced to sell household items at a lower value.
  • When borrowers cannot meet their commitments, the lenders seize their assets – either what has been offered in collateral (jewellery, equipment, vehicles), or anything else that the borrowers may own.
  • When an interest payment cannot be paid, additional repayments are added – sometimes 2 or 3 more per payment missed.
  • Borrowers are sometimes forced into unpaid labour to pay off their debts.
  • They can be threatened and intimidated. Some even get beaten up and/or publicly shamed.
  • Cases of moneylenders ‘taking’ children and forcing them to work to pay off debts are common. Sometimes young girls are married off to the moneylender to wipe out the debt.
  • Some borrowers feel they have no other option to end this vicious cycle but to take their own lives. Suicide to escape the crippling and never-ending debt is a last resort for many who feel trapped and see no escape.

Liberation Loans – Fighting Moneylenders through Microlending

At Akhuwat, we fight loan sharks who prey on poor families through our Liberation Loans. With them, we wipe out the debt a family owes to the moneylenders. We pay off the total balance in one lump sum, including interest to settle the debt completely. The stress that the borrowers carry worrying about how they will pay off this loan is immediately relieved. The loan shark is removed from their lives and they are freed from the burden of never-ending interest payments. To date, we have helped thousands of people by granting them loans of between PKR10,000 to PKR100,000.

The monthly repayment amount is fixed and repaid within a fixed period (maximum 3 years), so borrowers know there is an end to the debt. This makes a huge difference as borrowers can plan and budget for the repayments, knowing that the loan will be repaid within a short period. Once the loan is repaid to Akhuwat, the monies that loan recipients were paying as instalments can be used for other household expenses or to invest in anything else their families may need. This gives them the freedom to start making a better life for themselves and a better future for their children. Most importantly, they are no longer at the mercy of unscrupulous moneylenders.

Akhuwat’s Liberation Loans have helped thousands of impoverished Pakistanis break free from crippling debt, have reduced their stress and allowed them an opportunity of planning for a better future. Would you like to help poor people get out of crippling debt? Donate to our liberation loans and free them from the clutches of moneylenders.
Read more and donate here

Give Little, but Give Often

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Give Little, but Give Often

‘Do not show lethargy or negligence in giving alms and charity, until your last breath.’ (Bukhari)

In Islam, ‘Sadaqah’ is voluntary charity, given for the pleasure of Allah (SWT) without expecting anything in return. We know through numerous examples from the life of the Prophet (PBUH) that he gave freely to anyone in need. He was described as being ‘more generous than the blowing wind.’ (Bukhari). His generosity was compared to the wind because of its sustained blowing, which is a mercy that touches all in its path, indicating that the Prophet’s (PBUH) generosity was all-encompassing.

Our Prophet (PBUH) would give charity regularly and he advised us to do the same. We also know that in Islam, the best acts are those which are performed consistently. The Prophet (PBUH) said:

‘Take up good deeds only as much as you are able, for the best deeds are those done regularly, even if they are few.’ (Ibn Majah)
Giving regularly (by setting up a monthly debit order, for example), even if the amount is small, has multiple benefits. Here are some of them.

Regular Giving Helps us feel Empowered, Connected and Happier

Studies show that giving helps us feel socially connected and can actually improve our health. In addition, we feel empowered by seeing the impact of our giving and a recurring donation is a great way to maximise our impact. Giving also makes us happier and more grateful for what we have.

Regular Giving is Convenient for Budgeting

It’s also more convenient because it helps us budget for this amount monthly. And, we do not have to worry about the task of processing the payment each month. It helps us spread the financial impact of our contribution over a whole year, reducing the bigger, one-off payment which may negatively impact our budgets at the time. Spreading the contribution just makes it more manageable.

Regular Giving Spreads Goodness

Giving is contagious. When we give regularly and happily, we encourage others who see us do this, to do the same. We also set an example for our children to follow. This will help them grow into kind and compassionate adults.

Regular Giving Helps Charity Organisations

Consistent giving is also good for the charities that we support. It helps them with their budgets and planning and saves them time and money on fundraising. So, our monthly donation has multiple benefits for the organisations and their recipients.

Donate Regularly to Akhuwat and Earn Multiple Rewards

‘The most beloved of deeds to Allah are those that are most consistent, even if it is small.’ (Bukhari)

Do you want to make your regular charity giving even better? Donating to Akhuwat, will attract rewards, benefit our recipients and power up your contribution. Yes, your Sadaqah or Zakat will become exponentially rewarding in the long term too! Here’s how…

We use your donations to grant small interest-free loans to poor people who cannot access loans through regular financial institutions or banks. When these loans are repaid, they are reinvested into our fund pool and loaned out again to new borrowers. This process is repeated, again and again. So, your initial contribution will be helping several people and you will earn multiple rewards for your one-off donation. To learn more about Akhuwat Islamic Microfinance click here.

Set up a monthly direct debit to give regularly and start reaping all of the rewards for your ongoing generosity.
Set up a monthy direct debit

The Islamic Concept of Dignity

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The Islamic Concept of Dignity

Al-Zubayr ibn al-‘Awwam reported: The Prophet, peace and blessings be upon him, said, “For one of you to take his rope and carry a bundle of wood to sell, by which Allah preserves his dignity, is better than begging from people who may give or withhold.” (Ṣaḥīḥ al-Bukhārī, 1471)

This hadith highlights a fundamental value in Islam – human dignity. It is one of the many Islamic values and principles that we at Akhuwat believe in. Our vision is to create a poverty-free world by enabling people to help themselves, better their lives and live with dignity.

Karamah al-Insaan

Human dignity is defined as the right of every person to be valued unconditionally. In Islam, this is embodied in the Quranic concept of ‘Karamah al-Insaan’ (human dignity). Every person, regardless of who he/she is, is to be respected and given certain rights. This right can never be lost or taken away from a human regardless of his/her actions, religion, orientation or status. Even a criminal has a right to dignity; and also while being punished. Punishment should not be intended to humiliate, but to reform or discipline.

Karamah al-Insaan guides and regulates all our relationships, including those between Muslims and non-Muslims. As Muslims, it’s important we live this through our words and actions by treating everyone with respect and fairness. In this way, we will follow the Hadith of our Prophet Muhammad (PBUH) while following a fundamental teaching of Islam.

“Allah does not forbid you from those who do not fight you because of religion and do not expel you from your homes – from being righteous toward them and acting justly toward them. Indeed, Allah loves those who act justly.” (Quran, 60:8)
The rights that others have over us are to be honoured just as we wish our rights to be honoured. Practically, this extends throughout our daily lives in everything we do and say and in all our engagements with others.
Abu Huraira narrates that the Prophet Muhammad (PBUH) said: “Six are the rights of a Muslim over another Muslim.” It was said to him: “Allah’s Messenger, what are these?” He replied: “When you meet him, offer him greetings; when he invites you accept it. when he seeks your council give him, and when he sneezes and says: “All praise is due to Allah,” you say Yarhamuk Allah (may Allah show mercy to you); and when he fails ill visit him; and when he dies follow his funeral.” (Muslim)
This shows that as Muslims, we are there for one another, or should be there for each other, offering whatever help or kindness we can. Remember too, that we help others in a way that ensures their rights to dignity are respected and preserved. And this is what we at Akhuwat strive for.

Restoring Dignity through Interest-free Loans – A Hand-Up, not a Handout

Our flagship project, Akhuwat Islamic Microfinance (AIM) facilitates access to finance through interest-free microlending. Our recipients are people who need a helping hand to better their lives, but because of their circumstances, do not qualify for loans from conventional banks. We grant small, short-term loans for investment into their homes, businesses, children’s education or health. The capital amounts of the loan are repaid and reinvested into the loan pool to be re-used again and again, making today’s borrowers tomorrow’s lenders. This funding model has proved to be sustainable – our loan repayment rate is 99% – the highest in the world. The AIM funding model is a real solution to ending poverty forever.

More importantly, getting a loan from AIM honours a person’s desire and right to be self-sufficient. It is in our nature to want to take care of ourselves and our dependants, but some people need a helping hand to do this. Our loans empower people giving them confidence while respecting and maintaining their dignity.

AIM in action – Family Enterprise Loan granted to Muhammad Yasir

AIM has assisted approximately 5 million Pakistani families to become independent in this way. For example, we granted a Family Enterprise Loan to Muhammad Yasir to invest in his small store. Muhammad Yasir lives in Khuiratta – a small town in Azad Kashmir, about 100 kilometres from Islamabad. Life was tough for him and his family. His informal fruit stall earned barely enough to sustain them. Akhuwat granted him a loan of PKRs 30,000. He was able to invest in upgrading his stall and purchasing stock to give his business a boost. He began repayments a month after and like the majority of our borrowers, we expect this amount to be paid off in the stipulated time, or even sooner. It will then be re-used as a new loan for another needy recipient.

How you can help

Would you like to be a part of this revolutionary funding model that restores and respects human dignity? We accept donations of Zakat, Sadaqah or Lillah that we lend out to needy recipients. And when the initial amount is repaid, it will be re-used again and again. Your initial donation is maximised, as will be your reward.
Read more about AIM and donate

Mawakhat – The Foundation of all Islamic values

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Mawakhat – The Foundation of all Islamic values

Mawakhat, simply meaning, “brotherhood” is one of the most important concepts in Islam. It is interpreted as each person having a responsibility to others – to help and care for his/her neighbour, family member, friend or even a stranger.

The concept of Mawakhat has existed since the beginning of time but came to the fore during the time of the Prophet (PBUH). It explains and encourages Muslims to express empathetic feelings towards each other – which is part of our human nature.

Prophet Muhammad (PBUH) was sent as a blessing to all mankind. He re-established Islam – a universal religion embodying the unity of God and the brotherhood of man. Muhammad (PBUH) was the perfect example of these values – he lived a life of service and put others first.

“A Muslim is the brother of another Muslim. He does not oppress him, nor does he leave him at the mercy of others.” (Muslim)

Akhuwat was based on the founding principle of Mawakat, together with our guiding pillars: Iman, Ihsan, Ikhlas and Infaq. Mawakhat is the cornerstone of our philosophy of helping people to help themselves. It fulfils our vision and mission – to end the cycle of poverty.

The first and best example of Mawakhat in practice

The relationship between the immigrants of Mecca at the time of the Hijra and their hosts in Medina is the best illustration of Mawakhat in action. After the Hijra, the Prophet Muhammad (PBUH) instilled brotherhood between the Meccans and the people of Medina. The Medinites shared all they had with the Meccans who had fled from persecution, leaving everything behind. The Muhajirs came with nothing. The Medinites were warm, welcoming hosts, who opened their hearts and homes and shared whatever they had willingly. They came to be called the Ansar (literally “helpers”).

This shows that Islam encourages us to help each other because Muslims, according to the Holy Quran, are like one family.

Prophet Muhammad (PBUH), said: “The parable of the believers in their affection, mercy, and compassion for each other is that of a body. When any limb aches, the whole body reacts with sleeplessness and fever.” (Bukhari)

Mawakhat in the Holy Quran

The “Verse of Brotherhood” is Al-Hujurat and refers to the brotherhood of believers.

It says: “the believers are but brothers, so make settlement between your brothers. And fear Allah that you may receive mercy (Holy Quran, 49:10).”

Al-Hujurat also refers to equality between individuals. And points to the lack of difference between ethnic groups, tribes and race.

Practise Mawakhat Everyday

Being kind towards everyone is the first and easiest way to make Mawakhat a practice in our daily lives. Spending time with one another, helping in times of crisis, and offering counsel and comfort are the first steps. Another efficient way to practise Mawakhat is by donating to charitable organisations, like Akhuwat.

Akhuwat gives interest-free loans so people can empower themselves and improve their lives. Over short repayment terms, the capital amount is repaid through regular monthly deposits. These repayments are then loaned out to new borrowers.

Find out more about what we do here

Since starting in 2001, Akhuwat has helped almost 5 million families by providing interest-free loans so they can invest in their businesses, farms, homes, healthcare, their children’s education, or to free themselves from crippling debt. In total, we have provided 140 billion PKR (Pakistani Rupees) in micro-loans. That’s almost £20 million!

These loans empower people who would not normally qualify for conventional banking loans. We base our loans on the principle of providing a hand-up, so people can help themselves; not a handout, which can be quite limiting. In this way, our loan recipients are empowered and can strive towards self-realisation and independence.

At 99%, our repayment rate is the highest in the world. Paid-off loans are re-invested and loaned out again and again. Borrowers become lenders and donors! This means that your initial Sadaqah or Zakat donation becomes recyclable for perhaps, perpetuity, making this a truly sustainable aid model.

Will you join us by donating your to Akhuwat? Together, we’ll make a positive impact on alleviating poverty, through compassion and our interest-free micro-lending.
Read more about our work and donate here.

Diabetes Care and Management

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Diabetes Care and Management

Diabetes is one of the most prevalent health conditions. It affects people in every country, social strata and age group. Recent figures from the International Diabetes Federation show that approximately 537 million adults are now living with diabetes worldwide. This is a 16% increase from previous statistics released in 2019.

This rise in figures is concerning. There is no known cure for diabetes, and it can affect every part of a person’s body. What’s more, having diabetes increases the risk of other health conditions and can lead to strokes, heart attacks, kidney failure, blindness and lower-limb amputation. All of these result in a reduced quality of life and higher healthcare costs, which can place a heavy burden on sufferers and on a country’s healthcare system.

The Difference Between Type 1 and Type 2 Diabetes

Type 1 Diabetes is a genetic disorder that often shows up earlier in life. While Type 2 Diabetes is often diet-related and shows up later in life.

In Type 1 Diabetes, the immune system attacks and destroys the insulin-producing cells in the pancreas. Very little can be done to prevent Type 1 Diabetes. Whereas Type 2 Diabetes is more preventable because it is often caused by poor lifestyle choices.

Here are some common symptoms that could be an indication of Type 2 Diabetes:

  • Frequent urination
  • Increased thirst
  • Feeling hungry
  • Feeling tired
  • Slow wound healing
  • Recurrent yeast infections

Anyone can develop diabetes, but certain factors increase the likelihood. Here are some:

  • Being 45 years or older
  • Leading a sedentary lifestyle
  • Being overweight or obese
  • Eating unhealthily
  • Genetic predisposition, ie having a history of diabetes in the family
  • Having a medical history of gestational diabetes, heart disease or stroke

The Good News: Diabetes can be Managed!

If detected early and properly managed, people with diabetes can live long and healthy lives. This, of course, depends on two things: easy access to medication; as well as awareness and education about the impact that lifestyle can have on managing diabetes.

If undetected, diabetes can worsen over time and cause other complications. So, getting an early diagnosis and the right treatment is important. Here are some tips from The Mayo Clinic, that can help you avoid complications if you have diabetes:

  • Make a commitment to managing your diabetes. Make physical activity and exercise part of your routine and make healthy dietary choices.
  • Test your blood sugar levels regularly. Record them so you are aware of spikes or lows – both of which can be life-threatening. Most patients will test daily, and some before every meal.
  • Don’t smoke! Smoking increases the risk of various diabetes complications including:
    • Reduced blood flow
    • Heart disease
    • Stroke
    • Eye disease
    • Nerve damage
    • Kidney disease
  • Keep your blood pressure and cholesterol under control. These three key points are a must:
    • Eating a healthy, reduced-fat and low salt diet
    • Avoiding excess alcohol intake
    • Exercising regularly
  • Schedule regular check-ups with your healthcare professional. He/she will monitor your blood sugar levels, blood pressure, cholesterol etc.
  • Go for regular eye tests. Diabetes can cause sight issues like retinal damage, cataracts or glaucoma. You want to catch these early.
  • Take care of your teeth and gums. Diabetes can make patients prone to gum infections.
  • Care for your feet. High blood sugar can reduce blood flow and damage the nerves in your feet. Don’t ignore pain, tingling or any loss of sensation in your feet.
  • Take stress seriously and minimise it if possible. Set yourself limits, prioritise tasks, practise relaxation techniques and get enough sleep.

Diabetes in Pakistan

Pakistan has one of the highest rates of diabetes in the world. It is estimated that approximately 11% of the population suffers from diabetes and many others are pre-diabetic. There are several reasons for this, including diet and lack of exercise and even poverty.

In a country with high rates of poverty, addressing prevention and treatment is very challenging. The public healthcare system is underfunded and cannot cope with the number of people who need healthcare. While private healthcare is out of reach for most Pakistanis.

At Akhuwat, our Healthcare Services are key to the poverty alleviation work we do in Pakistan. Without proper healthcare, it becomes impossible for a person with diabetes to function, let alone work and lead a fulfilling life. Poor health perpetuates a cycle of poverty.

Akhuwat runs healthcare projects for underprivileged communities in Pakistan. We provide free examinations and consultations, followed by subsidised medicines and laboratory tests, where necessary. To date, we have provided free treatment for half a million people with various conditions including diabetes.

In 2009, we launched the Akhuwat Health Centre which has expanded since to include a specialised Diabetes wing. Many of the patients who benefit are the elderly who cannot afford treatment. Our interventions have made a positive impact on the lives of thousands of diabetes patients, who receive free treatment and education on how to better manage their condition.

You can find out more about our Healthcare Services and how to support our work, here.

AKHUWAT HEALTHCARE SERVICES

Ramadan Traditions in Different Countries

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Ramadan Traditions in Different Countries

Have you ever wondered how Ramadan is observed across different Muslim countries? The Islamic world is full of beautiful cultures which bring their own traditions to the way they practice the fundamental tenets of their faith. We’ve selected a few of the more unusual Ramadan traditions to share with you.

RAMADAN WITH AKHUWAT

In Indonesia, Muslims engage in a ritual called ‘Padusan’ before Ramadan starts. This involves bathing in natural pools to purify themselves, physically and spiritually. People also honour those who have passed on by cleaning graves of relatives. Indonesian Muslims also practise ‘Meugang’- sharing meals with the poor.

In Iran, the traditions vary from region to region. For example, people in the northern province of Mazandaran start fasting at the end of Shabaan, three days before Ramadan commences. So, effectively they fast for 33 days!

In Azerbaijan, on the last Friday of Ramadan, the women and girls get together and sew a bag. Money is added to the bag which is kept until the next Ramadan. This practice is called ‘Barkat Kisasi’ -meaning a bag of blessings.

In Morocco, drummers, dressed in traditional garb, walk through the streets before dawn, banging on their drums to wake people up for Suhoor. This tradition also exists in Turkey, Jordan, Egypt, Syria, Palestine and many other North African and Middle Eastern countries.

In the United Arab Emirates, people celebrate ‘Haq Al Laila’ from the 15th of Shabaan. This is a fun activity for the children especially. Emirati children dress in their best clothes and go to houses in the neighbouring areas reciting songs and poems. The neighbours welcome them with sweets and nuts, which are collected by children in traditional cloth bags. People use this time to remind themselves about the significance of Ramadan and to prepare themselves physically and spiritually.

Ramadan in Egypt is truly beautiful as people adorn their homes and public spaces with a ‘fanous’ – brightly-coloured glass and metal lanterns, that have now become a symbol of Ramadan. A tradition believed to have originated during the Fatimid Caliphate, the fanous has become a symbol of Ramadan across many Middle Eastern countries.  

‘Midfa al Iftar’ is an ancient Lebanese tradition. A cannon is fired at sunset indicating the end of the day-long fast. Lebanon has special Midfa al Iftar cannons from the nineteenth century, that are used only in Ramadan. Turkey and many other Arab countries also practice this tradition, which is believed to have originated in Egypt during the Mamluk period.

In India, Pakistan and Bangladesh the last night of Ramadan is known as ‘Chaand Raath’ -Night of the Moon. The Eid celebrations start as soon as the new moon of Shawaal is sighted. People exchange gifts and sweet treats and go shopping for last-minute Eid items. The women and girls also get mendhi (henna) designs drawn onto their hands in preparation for the next day – Eid.

The Tradition of Giving Charity in Ramadan

Some Ramadan traditions are very unique to a specific cultures, while others are shared by many Muslim countries. But there is one practice, fundamental to Ramadan, which is observed in every Muslim country. That practice is charity.

‘Ramadan is a blessed and honourable month, and the rewards for charity are multiplied in it. The best charity is that which is given in Ramadan.’ (Tirmidhi)

Charity-giving is a fundamental part of Islam, practised by all Muslims in every country and culture. But in Ramadan Muslims practice generosity more. In fact, giving charity, if one can afford it, is considered by many as obligatory, and just as important as fasting. One reason is that fasting allows us to empathise with those who are less fortunate and who feel hunger every day. Another reason is that our Prophet Muhammad (PBUH), who was the most generous of people, was even more generous in Ramadan, and Muslims want to do as he does out of love for him.

Narrated by Ibn ‘Abbas: ‘The Prophet (PBUH) was the most generous of all the people, and he used to become more generous in Ramadan when Gabriel met him. Gabriel used to meet him every night during Ramadan to revise the Qur’an with him. Allah’s Messenger (PBUH) then used to be more generous than the fast wind.’ (Bukhari)

Below, we’ve listed some of the charity-giving traditions in different Islamic countries.

Ramadan Tents in UAE

In the UAE, especially in Sharjah and Dubai, individuals and organisations set up Ramadan Tents and serve hot meals to needy people at Iftar. These tents accommodate a few hundred to thousands of diners at a time. Charity meals are also served at mosques and everyone is welcome to partake in the Iftar provided.

Bread on a Hook/Hanger in Turkey

This is an ancient Ottoman tradition inspired by Islam and still practised in Turkey today. It’s called ‘Askida Ekmek’ which means ‘Hanging Bread’. People give money to a local bakery or pay extra for the bread they purchase so the baker can bake extra bread and offer this to the needy without charge. The donation of ‘ekmek’ (bread) ensures no one goes to bed hungry. This tradition has special importance in Turkey because in Islamic belief the preservation of life is sacred and bread sustains life.

Giving in Secret in the Middle East

In Gulf countries, people are encouraged to pay their Zakat and Sadaqah in Ramadan and to give privately, if possible. The names and the sizes of donations are not disclosed as Islam emphasises secret giving over public shows of generosity. This tradition respects the dignity of the recipients and prevents arrogance in the donor.

Bazaar/Pasar Amal in Indonesia

These are markets organised by various civic and charitable organisations, where goods that are donated by businesses and individuals are sold at greatly discounted prices. In this way, the poor can also celebrate the Eid holiday with new clothing and special foods.

Mawaeed Al-Rahman in Egypt

During Ramadan, many people who can afford to, host public banquets for the needy. These are called ‘Mawaeed al-Rahman’ -Tables of Mercy, where everyone is welcome. People set up long wooden tables on streets in their own neighbourhoods and in poverty-stricken areas to feed the poor.

As we can see, generosity and almsgiving is an integral part of Islamic culture and traditions everywhere in the world. But, when we give in Ramadan, we’re not only helping people with their physical needs, we give them a chance to focus on their spirituality. So, our rewards are even greater. It’s no surprise then, that the tradition of giving charity is practised so widely in Ramadan. It’s the best time to give Zakat (obligatory charity) and Sadaqah (voluntary; given for the pleasure of Allah (SWT)). And don’t forget – our rewards are multiplied!

Your Zakat and Sadaqah is a Big Help

Your charity makes a big difference to the people we support at Akhuwat. Ramadan is a time when our fellow Muslims need our help the most. In Pakistan, where we run our projects, and where 60% of the population live below the poverty line, food prices soar during Ramadan. This is why our efforts intensify over this period to answer the growing need.

At Akhuwat, we are working to end poverty completely, and that’s why we do something a little different when distributing the Zakat and Sadaqah you entrust to us. Find out how our development work is sustainable, and how you can empower the poor to raise themselves out of poverty this Ramadan.

SEE OUR RAMADAN PROJECTS

Gifts of Ramadan Fasting and Zakat

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The Gifts of Ramadan:
Fasting and Zakat

Ramadan is the month of blessings, in which all Muslims who are able, perform two of the most important pillars of their faith: Fasting and giving Zakat. Here is why both are integral to our lives as Muslims, and how they’re beneficial to us as individuals and for our society at large.

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‘Oh, you who believe I give you and prescribe to you fasting. Maybe you will gain Taqwa (Piety).’
(Quran, 2:183).

Fasting in Ramadan

Fasting is a gift from Allah (SWT). It is the fourth pillar of Islam. In the Holy Qur’an ‘Taqwa’ – the increasing of our piety and God-consciousness is cited as one of the benefits of fasting.

Muslims fast for the sole purpose of pleasing Allah (SWT) by adhering to His commands. With this intention, we hope to cleanse ourselves spiritually and draw closer to Allah (SWT). So, in what other ways does abstaining from food and drink in the daytime as a spiritual act, benefit us and our society?  

Personal Benefits of Fasting

Fasting weakens the Nafs/ego – The Nafs is that part of us that compels us to our animalistic desires. As we indulge our physical needs like food and drink, our Nafs is strengthened. By depriving our bodies of physical needs, the Nafs is weakened, and we are more inclined towards our spiritual lives.

Also, fasting encourages us to refrain from bad habits. As the hadith goes: ‘Whoever does not give up false speech and evil deeds while fasting, then Allah is not in need of his leaving food.’ (Bukhari, 1903). We want our fast to be as perfect as possible so that it is accepted, so we hold our words and actions to account more while fasting.

Fasting forgives past sins. And when our spiritual connection to Allah (SWT) is enhanced, we strive to be good and do good. Allah says about the fasting person: ‘He has left his food, drink and desires for My sake. The fast is for Me. So I will reward (the fasting person) for it and the reward of good deeds is multiplied ten times.’ (Bukhari, 1894).

‘Prayer is the light of the believer and fasting is his shield from the fire.’
(Ibn Majah, 4210).

Social Benefits of Fasting

Even though fasting is a personal sacrifice, it also assists us in fulfilling our social responsibilities. As our spiritual selves are enhanced, we become more aware of others and their needs. We become more compassionate, firstly because thirst and hunger allow us to empathise with people who rely on our charity, and also because the focus on our spirituality helps us remember our responsibility towards those less fortunate than ourselves.

So the month of Ramadan is not just about refraining from food and drink. It’s also a time to be generous, especially to those who are less fortunate than us, those who experience hunger every day. For this reason, we are encouraged to increase charity in Ramadan.

Giving Zakat in Ramadan

When Ramadan is mentioned, we automatically think of fasting. But Zakat also features prominently in this month. There is no hard and fast rule that Zakat must be given in Ramadan. Muslims are free to give it throughout the year, piecemeal or in one lump sum. However, most Muslims prefer to give their Zakat in Ramadan for several reasons:

  • It allows us to clearly mark the completion of a lunar year so that each Ramadan serves as a reminder that it’s time to give our Zakat again.
  • It also helps when we’re calculating how much we must pay since any savings we have (that are over the Nisab value) must have been in our possession for a lunar year before Zakat is due on them.
  • It means reaping maximum rewards on our Zakat since Allah (SWT) multiplies the rewards of all our worship and charity in this month by 70!

‘Establish regular prayer and give Zakat, and obey Allah and His Messenger.’
(Quran, 33:33).

Personal Benefits of Zakat

There are many benefits of giving Zakat for the giver, maybe even more so than for the recipient:

  • Firstly, Zakat cleanses our wealth. Zakat or Zakah literally means to ‘purify/clean’ and by giving away a portion of our wealth to those who have a right over it, we cleanse all our wealth.
  • Giving Zakat removes the love of worldly possessions. We know that greed is one of the sins that keeps us away from goodness, so by giving Zakat, we release our attachment to wealth and possessions.

‘Verily those who give alms–be they men or women, and give Allah a beautiful loan shall be repaid after increasing it many times; and theirs shall be a generous reward.’
(Quran, 57:18)

Social Benefits of Zakat

Zakat is designed to help ease the burden of our Muslim brothers and sisters less fortunate than us. The people who have a right over our wealth – the widows, orphans, the disabled, the needy, the destitute are helped through what is due to them.

Zakat has the potential to change the world and make a fairer and more just society, by ensuring wealth is more equitably distributed.

How you can Help

At Akhuwat we tackle poverty by distributing Zakat as interest-free microloans. This allows donors who want to give Zakat, to achieve more; more than just helping someone for the immediate term.

When the loans are eventually repaid, the money is reinvested to provide new loans to other needy people. This is repeated again and again so that your initial Zakat donation helps multiple families for years to come.

Read more about Akhuwat’s various loan products and donate your Zakat with us this Ramadan.

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How Microfinance Alleviates Poverty

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How Interest-Free Microfinance Alleviates Poverty Sustainably

Poverty is probably the biggest problem the world faces right now. Almost a tenth of the world’s population lives in extreme poverty, meaning they live on less than $1.90 a day. The majority of these people are based in rural areas and rely on subsistence farming to survive. However, with the increase in droughts and other natural disasters due to climate change, as well as internal conflicts and the Covid-19 pandemic, the global situation has been rapidly deteriorating.

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For the poor, whatever money they earn is just enough for survival, and saving is impossible. With no chance to save, these people can never afford to make changes in their lives to lift themselves out of poverty. And because they are irregular or low-earners, they can’t access loans from financial institutions. The cycle of poverty perpetuates. Over time as their needs grow, their already dire situation worsens.

NGOs and charitable organisations step in where government interventions are inadequate or non-existent. But even with charities coming to the rescue, it’s still not enough. There are as many as 1,54 million registered non-profit organisations in the world, but we are still not reaching all the people that need assistance. This begs the questions: Are we doing something wrong? How can we assist people in the long term? How do we ensure our interventions become sustainable?

Sustainability, Sustainability, Sustainability!

Ensuring projects are sustainable is a no-brainer. If organisations just keep giving without a long-term plan, resources will eventually dry up. To effectively address this challenge the ‘giving’ model of most charity organisations has to be reconsidered. This isn’t to devalue the incredible work charities and NGOs do. They raise billions of pounds annually to help millions of people all over the world. They provide help to the people who need it most. And, to their credit, many are looking at innovative ways to make their projects more sustainable.

Many organisations are now investing in empowerment projects. They train local communities, groups of women, youth, etc. to help them find jobs or start businesses. Others provide employment opportunities and invest in entrepreneurship and mentorship programmes. All with the aim of making programme recipients less reliant on aid, and hopefully, eventually completely independent.

At Akhuwat, our work has been about sustainable development from the get-go. For more than 20 years, we’ve been working to eradicate poverty, by giving people a hand up to help themselves. Our mission is to help people become self-sufficient and independent through interest-free microfinance loans.

What is Microfinance and How does it Work?

Akhuwat adopts the Quranic concept of “Qarz-a-Hasan” (a beautiful loan) as its core strategy for microfinance. Microfinance is a banking service provided to unemployed or low-income individuals or groups who would otherwise have no other access to financial services.

The idea is based on an experiment conducted in the 1960s by a professor who lent women in the poverty-stricken village of Jobra (Bangladesh) the sum of $27 each. This sum was lent without interest. The women invested the money in farming (purchasing seeds and implements) or in the small enterprises they ran. The results were more than encouraging. All these women were able to improve their individual earning capacity and, most importantly, the loans were returned in full.

Akhuwat has several different loan products, including Family Enterprise Loans, Agricultural Loans, Housing, Education, Health and Marriage Loans. The loan amounts are small: between Rs10 000 to Rs50 000 or Rs100 000. But they extend a lifeline to thousands of people who cannot get traditional bank loans.

The Impact of Microlending

Independent studies have indicated that the interest-free microlending model has made a difference in addressing poverty. But the most heart-warming testimonials come from the recipients themselves. In 2017, we conducted a household survey asking loan recipients whether the loans had made an impact and how. The results were extremely promising. Overall, clients reported positive changes. Seventy-seven percent of clients stated that their living standards had improved; one-third mentioned an increase in income; and 26% reported increased consumption. This survey was conducted for clients who borrowed funds only two years previously, but the impact has already been significant.

At Akhuwat, we see the difference our loans make. And our repayment rate at 99.9%, is testament to this. Because of the success of our microlending projects, our model has been studied by international universities, and we have received several awards and recognitions. Read more about Akhuwat and the difference it is making to thousands. We continue to expand our reach and welcome partnerships with individuals, governments, and other organisations. See how you can get involved and help. Together, we can positively impact more lives.

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Giving the Gift of Dignity

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Akhuwat Clothes Bank: Giving the Gift of Dignity

Akhuwat’s Clothes Bank project is more than just about clothes. By collecting old clothes and distributing them to people who cannot afford to clothe themselves and their families, we give basic dignity. But we also give dignity and empowerment to the people who work at our clothes banks. These people are Khwajasira -a marginalised transgender community in Pakistan. Often misunderstood and discriminated against, they are socially and economically excluded from society and may even be ostracised by their families. This leaves them dependent on charity and vulnerable to exploitation and abuse. For these transgenders, it can be very difficult to find jobs.

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Being employed by Akhuwat’s Clothes Bank project, helps Khwajasiras earn an income and gives them an opportunity for a life of self-sufficiency and dignity. Able to fend for themselves, the Khawajasira we work with, are no longer reliant on charity. They feel empowered and proud that they are responsible for their own livelihoods.

For us at Akhuwat, this humanitarian aspect is a very significant part of the programme. It aligns with our commitments to respect all and treat everyone as equals.  

How Akhuwat Clothes Bank Works

Because fashion is seasonal, often clothing that was in vogue just a year earlier, but still in good condition, is considered dated. People may update their wardrobes regularly, but what happens to these ‘old’ clothes? Do they end up in landfills? Akhuwat Clothes Bank offers a solution to the problem of fast fashion, which is harmful for our environment. We take unwanted clothes, wash and mend them, then distribute them to needy people.

Our clothes bank employees from the Khawajasira community are responsible for processing clothes when they come in. They sort, wash, repair and re-pack them with dedication, ready to be gifted to needy people across Pakistan, through Akhuwat branches and other charity organisations we partner with on the ground. We also collect toys, books, furniture, home textiles and other household items that are unwanted, but which poor people are in want of.  

Akhuwat’s Clothes Bank project benefits so many people on so many levels. By recycling, it helps to address the problem of pollution. It provides employment to needy and marginalised people. It provides clothing for the needy. And donors are rewarded with blessings for their charity, when grateful recipients make Dua for them, as they use the donated items. What’s more, donors also get to declutter and make space in their cupboards and lives. Clearing out helps one feel lighter and breathe easier.

We are thrilled that ACB encourages this simple, compassionate and eco-friendly lifestyle by giving people an opportunity to share and recycle.

Akhuwat Clothes Bank Successes

Since Akhuwat’s Clothes Bank project was launched, we’ve distributed 2,7 million items of clothing, and hundreds of thousands of toys, books and other useful items to 2,5 million people all over Pakistan. In a country where 60% of the population live below the poverty line, our success is nothing less than a small miracle.

In 2014, we launched the Akhuwat Clothes Bank Gift Shop, located at our head office. Any person in need can walk into the store, choose suitable items and take them without any payment. Our Gift Shop also has wedding attire for brides and grooms who cannot afford bridal garments. They are able to borrow these clothes, which would normally be too expensive, use them for their special day and return them, without any charge.

Akhuwat’s Vision: Iman, Ihsan, Ikhlas

Akhuwat is an award-winning NGO based in Pakistan that is helping to alleviate poverty in sustainable ways. Our interventions are designed to ensure that recipients are given a hand-up, not just a handout. We want to help people help themselves so they can live with dignity and feel empowered.

Akhuwat’s commitment to help those less fortunate is based on our founding pillars of Iman (faith), Ihsan (excellence in action) and Ikhlas (purity of intention). All our projects, like the Akhuwat Clothes Bank, are practical, functional and beneficial, while being based on Islamic principles.

This hadith of our beloved Prophet Muhammad (PBUH) is our inspiration to continue our work.

‘Whoever fulfilled the needs of his brother, Allah will fulfil his needs; whoever brought his (Muslim) brother out of a discomfort, Allah will bring him out of the discomforts of the Day of Resurrection, and whoever screened a Muslim, Allah will screen him on the Day of Resurrection.’ (Bukhari, 2442)

How you can Help

To make a donation to the Akhuwat Clothes Bank project, call 0300 065 9292 or email donations@akhuwatuk.org

Done your downsizing? You can help us by telling your friends and family about the Akhuwat Clothes Bank. Encourage them to also collect old clothes and other items and donate them. Together, we can all earn rewards, while making a difference to people’s lives.

At Akhuwat, we also accept monetary donations towards some of our other poverty alleviation projects. You can find out more about our project HERE

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Housing a Human Right

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Housing: A Human Right

Having a decent house is a human right. It is critical to a person’s health, dignity, safety, as well as their inclusion and contribution to society. Though Pakistan is considered a poor and developing country, a surprisingly high number of people own their own homes. These people make up 75% of the population; while just 25% of people rent.

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The standard and quality of the homes in Pakistan vary significantly, though. There are ‘pukka’ houses made of substantial materials like stone, concrete, brick and timber. But many homes in Pakistan are ‘katchi’ -meaning ramshackle – made of mud, bamboo, reeds or thatch. Most of these ramshackle houses exist in in villages, where more than 60% of the population live. This means that most Pakistanis live in sub-standard homes which do not offer sufficient resistance to the elements like rain, wind and the cold. Many of these katchi houses do not have bathrooms, either, nor running water or electricity.

It is nearly impossible for poor people, who live in ramshackle homes, to repair or improve their living conditions. Because of their low income, most live from day-to-day, with the bulk of their earnings covering the basics like food, clothes, transport or education for their children. It is almost impossible for them to save money to renovate their homes. And yet, the home environment of some of Pakistan’s poorest often verges on a safety hazard.

Akhuwat Housing Loans: A Beacon of Hope

Akhuwat Islamic Microfinance (AIM) provides interest-free loans to people who wouldn’t normally be able to access loans through traditional financial institutions like banks. Our Housing Loan helps poor home-owners who want to improve their houses, but cannot afford to do so. We provide financing for renovation and upgrading, as well as for the construction of rooms and bathrooms, roofs, walls, or whatever else people need to make their homes more liveable. To date, we have helped thousands of families improve their homes.

Here’s how it works: Under this scheme, needy and deserving families are provided with Shariah-compliant financial assistance. Interest-free loans up to PKR 500 000 (half a million Pakistani rupees) are given to families who own the land that their homes are on. They can repay the original amount in monthly instalments over 13-60 months.

Akhuwat gives precedence to widows and households with a monthly income of less than PKR 40 000. To qualify, applicants need to tick the following boxes:

  • Be a Pakistani national.
  • Be up to 60 years in age.
  • Provide proof of ownership of the property.
  • Have a monthly income up to PKR 60 000 per month.
  • Be residing in an area where there is an Akhuwat branch.
  • Have a good credit rating (if applicable) and/or a good moral and social standing in the community.
  • Provide two guarantors who are not family members.

Akhuwat has enjoyed incredible success over the years: our repayment rate is at 99.9%! This is in part due to our strict application process, where borrowers have to provide references. But it’s also because of the positive impact of community involvement. We disperse our loans in religious institutions like churches, mosques and temples while the congregation is present. Using these public places ensures transparency, participation and accountability, while also helping to keep down operation costs. And because the community is involved, there is a high rate of compliance and return.

Do you want to support Akhuwat? Your donations provide loan products that help people who are not only deserving but committed to returning the funds they borrow, which we are then able to loan out again and again. In this way, your initial donation helps many families improve their living conditions. Find out more about the Akhuwat Housing Loans, as well as the other interest free micro-loans we offer to help raise families out of poverty.

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About Us

Akhuwat provides collateral- and interest-free loans to underprivileged families so they can help themselves out of poverty. With one of the highest loan return rates in the world, Akhuwat continues to transform lives one loan at a time. Akhuwat is registered in the UK with the charities commission (registered charity number 1136317)

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Akhuwat UK 540 Valence Avenue DAGENHAM RM8 3QH Phone No: 0300 365 9292 Email:Donations@akhuwatuk.org

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