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.

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.