Berkley Center

Background: The context for this discussion is preparation for a consultation on faith and development in South and Central Asia in Dhaka, Bangladesh, on January 10-11, 2011. The consultation is an endeavor of the World Faiths Development Dialogue (WFDD) and the Berkley Center for Religion, Peace, and World Affairs at Georgetown University, with support from the Henry R. Luce Foundation. Its aim is to take stock of the wide range of ongoing work by different organizations that are, in varying ways, inspired by religious faith, but more important, to explore the policy implications that emerge from their interactions with development organizations. The interview was conducted by telephone between Michael Bodakowski and Dr. Muhammad Amjad Saqib. Dr. Saqib is executive director of Akhuwat. In this interview he reflects on his role as the founder and director of an interest free microfinance institution. He talks about how his organization functions on a technical as well as a social level. He discusses his engagement with religious institutions and leaders, and how this helps him to earn the trust of the communities he works in, as well as to ensure the sustainability of his organization. Dr. Saqib argues that faith is an intrinsic part of development, and that to leave out faith is excluding large parts of the population. He urges international development actors to increase their engagement with religious leaders to be able to reach the most marginalized. He concludes with observations about education in Pakistan and identifies common ground between faith-based and other development actors.

Tell us about your personal story and path, and how you arrived to do the work you are doing today?

Many years ago, when I was in the civil service of Pakistan, I got an opportunity to work for a poverty alleviation program. It was there that I learned much about microfinance. During my stint in this program, besides many other experiences, I also made two interesting observations. The first was that people were reluctant to take loans with built-in interest as it is forbidden in the religion. Let me add here that every religion in the world is against usury or charging interest on loans. Though people did not like interest-based lending, yet they had no other option and hence, they had to participate in this form of borrowing.

The second observation that disturbed me immensely was the exorbitantly high rates of interest that were being charged from the poor. If a rich person wanted to buy a luxury item like BMW or a Mercedes, he could get a loan at 12 percent or perhaps 15 percent. However, if a poor person needed a loan, it was more than likely that he would be given that at 30 to 40 percent rate of interest. Even from a secular point of view, this becomes a question of gross inequity. We have slogans all over the country that suggest that we should help the poor and yet, we are charging a 30 to 40 percent interest rate on loans and making the poor even poorer. These two observations prompted me to find a solution to the issue of high interest on small loans and also encouraged me to critically examine the social, moral, and cultural values of society that allow such forms of usury.

On one particular day, a very poor woman came to me. She said she was a widow and if she was given a loan for Rs. 10,000 (which is about $150), she would be able to keep her livelihood; however, she insisted that the loan should be interest free. So, I requested a friend of mine for support. Together we generated a pool of money and were able to loan her the money on those terms. She was so touched by this gesture that she worked even harder. She made good use of the funds and in a span of mere six months she was able to improve the lives of her children and other members of her family. She was able to marry one of her daughters. She also repaid the borrowed amount. That was the beginning of this organization, which was named Akhuwat.

Please tell us more about Akhuwat.

After the delivery of the first loan, we created a pool of money through donations from known philanthropists, friends, and well-to-do people. That pool of money was our capital which, thankfully, came to us free of cost. We started to distribute that money to the poor without any loan fees and without charging interest. Our initial loan was Rs. 10,000, and I am proud to tell you that by December 2010 we had loaned close to Rs. 1 billion. Our current pool of money that is around Rs. 250 million is like a revolving fund. We loan money to the poor, we recover our loan, and then we loan out the money again to another person in need. Through circulating this amount of money amongst the poor, we have been able to generate loans near to Rs. 1 billion. Our recovery rate, at 99.7 percent, is astonishingly high and speaks of the fact that the poor are trustworthy people.

The entire program is founded on the concept of “Akhuwat,” which in Arabic means brotherhood. We borrowed this concept from the tradition of the Holy Prophet, peace be upon him. The Prophet, peace be upon him, said that the best way to end poverty is not through charity but through sacrifice and adoption. He suggested that a wealthy person should adopt a poor person and help that person. To be more precise, a wealthy person should enter into a relationship of brotherhood with a poor person and then help that person through a bond of association instead of giving dissociated charity.

This is the notion of brotherhood that links a wealthy person to an underprivileged person and it is derived from the teaching of the Qur’an. This is the philosophy behind our organization. We believe that poverty cannot be eliminated through charity; in fact, it requires a bond of brotherhood between the “haves” and the “have nots.” Let me explain through an example. The total population of the world at present stands at six billion. Two billion of these are below poverty line. If the top two billion who are not poor adopt the bottom two billion who are poor, i.e. one person adopting only one, then the bottom two billion may be lifted from the quagmire of poverty. It looks very idealistic but it is simple. Akhuwat’s four guiding principles are derived from this one basic concept.

The first principle of our organization is that we do not charge interest on our loans. Interest is forbidden in Islam, Judaism, Christianity, and all major religions of the world, and we think that interest is one of the basic reasons for poverty and exploitation of the poor. After we decided not to charge any interest, we suddenly ran into the problem of sustainability. If we are not charging interest, how are we going to cover operational expenses? We brainstormed solutions and finally got an idea. The idea was that we could work at local religious centers such as mosques and churches and link our offices to these instead of having an office in an expensive building. That way, we could be in touch with people and the local imams and priests that are providing services to the people of Allah. This would also enable us to be in touch with the community and not only help raise funds but also help identify people in need and distress.

This innovation developed into the second principle that guides our organization, i.e. we operate from local religious centers. We researched the history of religious institutions and found that they had been centers of community participation in the past. They provided services to the poor and were the platform for community action. In the city of Lahore there are more than 17,000 mosques and a good number of churches and unfortunately these are all underutilized, only used during prayer time. During other periods of time they are mostly empty. So we linked our office with a mosque and started doing most of our activities in the mosque. We received immediate support and trust of the community and were able to also reduce our operating costs.

The third principle integral to our organization is volunteerism. A civil society organization is different from a private sector organization because it has in-built volunteerism. If any civil society organization is devoid of the volunteer spirit, it runs the risk of becoming a business. In Akhuwat, we expect people to give their time and their abilities; the spirit of the entire organization is based on volunteerism. This is also derived from our faith, in which the principle of volunteerism is the most important part of every tradition. Every prophet is a volunteer, right from Abraham, Moses, Jesus, and the Holy Prophet, peace be upon him. The Prophets always looked beyond themselves to help the community socially, morally, economically, and politically. We wanted to follow the footsteps of these great prophets and adopt their methods of bringing change to the community through participation.

The fourth principle for our organization is that we do not want to make people dependent. We want the people who borrow from us to stand on their own feet and one day become donors themselves for others in need. We are not charging any interest or profit, but we are supporting people and hopefully instilling a value to help others after their own needs are fulfilled.

All religions place emphasis on charity and also teach that charity is not confined to the wealthy members of society; everyone is responsible to give, based on his or her resources. We believe that society flourishes, progresses, and develops only when there are more givers than takers. For the long-term sustainable development of a society, we have to create a critical mass of people who are willing to give to the poor and needy instead of taking.

In Pakistan 50 percent of the people are poor and the other 50 percent are not poor. If the 50 percent that are wealthy stand in solidarity with the 50 percent that are poor they could improve social conditions for everyone. You may consider this an idealistic vision of the world but we have tried, tested, and achieved it. We have been able to reach over 80,000 families, and we still continue to progress and grow.

I believe these four principles are relevant not only in Pakistan but in any society. Whether a person is secular or follows a religion, these principles are important and appealing to all. However, for us at Akhuwat, these principles are linked to the faith. We promote this spirit of brotherhood as taught by the Holy Prophet, peace be upon him, to alleviate poverty. It is not charity but rather adopting a family and helping it improve its life through sharing instead of charity. We organize all of our programs around this central tenet. Though the inspiration is derived from the Islamic concept of brotherhood, the message is for all humankind. We do not discriminate on the basis of religion, race, caste, creed, tribe, or gender. We are trying to support the people irrespective of any divide or affiliation.

What does development mean for Akhuwat?

We believe deeply in participatory development. We believe in inclusive development. In a religion-centered country like Pakistan, if you do not involve the religious people—including the mosques and the imams—then a large part of the population and society remains excluded. Religion is also pro-development. Any development model that excludes religious people, places, and spaces is insufficient to cater to the needs of entire population. If we want to include the poor living in rural areas and slums in the development process, then we will have to involve faith, religious actors, and religious places. We thus decided to bring religious institutions to the development forefront and make them partners in the development process.

This is our understanding of an inclusive and participatory development model. It also needs mentioning that there is no religious, gender, or age discrimination in our organization. For example, Christians come to the mosque and Muslims go to the church as well. This has promoted interfaith harmony; for the first time Christians are welcomed in mosques. Women are facilitated to come to the mosques freely. In this way we have been able to help different social and religious communities bind together to respond to common concerns, issues, and challenges. I would like to reiterate that religion should not be excluded from the development paradigm. Development is not just an economic change; it is social, moral, and political. Religion primarily focuses on social and moral development of the individual, which it aims to attain through leading by example, equity, compassion, provision, securing of human rights, and equitable distribution of economic resources. Development process in a society therefore needs to involve indigenous institutions and faith.

Can you expand on how Akhuwat gets funds for its operational costs and guarantees repayment of its loans?

We have our offices that are linked to a church or a mosque. Some of our activities take place in the mosque or the church and some of them take place in the office. This is how we keep our operational costs low. The conventional microfinance organizations spend about 30 percent of the disbursed amount for operations. We have reduced our cost to 10 percent of the disbursed amount. This is one third of the operating cost of a traditional microfinance organization.

It is interesting to note that around sixty percent of our costs are met by donations from our borrowers. We inspire them to donate as much as they want in return for the interest free loan. Without any compulsion or coercion, they are giving donations to meet operational costs; this makes us 60 percent self-sufficient. The way the program is progressing, we believe that in few years, the entire operational cost will be matched by donations given by the borrowers, and we will be operationally self-sufficient.

Akhuwat is gradually becoming a cooperative movement. There is no other organization where the beneficiaries are the donors as well. There is a tremendous amount of willingness among the borrowers to become donors of this program. They are committed to making it better, through supporting the program and ensuring that it is sustainable. Akhuwat is providing them services that are aligned to their faith. This has cultivated their ownership, and “ownership” is critical for the success of a development program. This voluntary donation is also indicative of the fact that they are coming out of poverty. It proves the success of interest-free credit methodology.

What is the nature of Akhuwat’s relationship with local churches and mosques? How are local faith communities and religious leaders directly involved in community development activities?

Initially there was some resistance from the religious leaders, and some of the imams did not understand our vision. Religious leaders, as we have noted, are generally excluded from mainstream development. They thought we were encroaching on their domain; they did not trust us and they thought we had a hidden agenda. They did not think that we could bridge these two worlds, the economic and the spiritual; they doubted our intentions. We tried to explain that religious places are also meant for the social welfare of human beings, and we gave examples from Islamic history and reminded them that the mosque was once used to be the seat of governance. It was always a part of the development process; we did not want to take control of the mosque, but we were trying to utilize the institution to help the community and promote peace and equity. Once they understood, they responded positively. They also realized that when we give loans through the office of the mosque, the social status of the imam is raised and he feels empowered. The entire process is about engaging and empowerment. Through our program, we have tried to take the mosque out of seclusion and brought it into the development mainstream.

It was a difficult path and we struggled, but we have managed to make progress. Now as a routine matter we also involve the mosque to implement a social agenda. We teach the people about the importance of educating women, about human rights, environmental pollution, education and health issues, etc. On the one hand it is about loans, entrepreneurial training and capacity building, and on the other hand it is about social development and guidance to enable the community to progress. We have found a thriving institution where many players can pursue common objectives in a fully transparent and participative manner.

You mentioned that religious leaders are excluded from mainstream development. Why is this so and what are the main tensions? How can secular organizations better work to bridge this gap and overcome these tensions?

It is extremely important in a society like Pakistan, which has a huge faith focus, that people realize that you cannot have development without involving faith-based institutions. Engaging the faith leaders is the most important thing to do for the uplifting of the community; however, it is only possible through dialogue and mutual understanding and frequent interaction. The religious leaders live in a domain of their own. They mostly do not trust the outside world. The non-religious people and the secular agencies also stay aloof and do not try to pursue a productive dialogue with the religious leadership. How will the much needed harmony in the society be achieved?

There are thousands of madrasas and each one has a mosque attached to it. We need to enhance the options available to these students and try to bring them into mainstream society. We need to engage the madrasa leaders and the students so that they are aware of the options that are open to them. Without working with them, we cannot involve or engage them in development activities. As I said, when I first went to the religious leaders and told them about the program they were distrustful; over time, our relationship has changed and developed into mutual trust and accommodation.

Poverty in fact is poverty of opportunity. We told the religious leaders that the purpose of our program was to give poor people opportunity to access loans or financial resources so that they could improve their lives. We also told them that we are giving people loans according to the tenets of Islamic faith, and this is also in accordance with the teaching of all religions. We are not charging interest and yet, we are managing to give the poor people access to resources and opening doors to development.

Let me give you an example from Bangladesh. Similar to Pakistan, faith is an integral part of the Bangladeshi culture. The country became successful in the implementation of its population control programs when it engaged the faith leaders. Faith proved to be a key success factor. The religious leaders are not against development, but we need to engage them like other stakeholders, so that they understand the process and can be included in it.

This is not an easy task. There are many barriers. Religious leaders are often not as well educated in development disciplines. Sometimes they do not speak the language the people in development organizations speak. So inclusion here entails a different strategy; we engage them in creative ways so that we can talk about education, microfinance, women’s empowerment, and social and economic development in general.

This inclusion is the only way to fight against illiteracy, ignorance, discrimination, extremism, and terrorism. Religion is a positive force. It does not teach war, violence, or terrorism, and it certainly does not take away the liberties of women and the poor. All religions came to rescue the disadvantaged. If you see the history of Islam, you will see that the Holy Prophet, peace be upon him, stood for social justice. He stood for empowerment of these who were extremely disadvantaged and marginalized. Religion is the pinnacle of moral values and should work in communion with development organizations to eliminate injustice, war, hatred, and violence.

How would you advise secular organizations to engage religious leaders on a practical level?

The best way to bring these issues to the forefront is to present this alternate paradigm and communicate it to the world. We should organize workshops, seminars, and conferences; write case-studies and publish books; and then bring people to a common platform where we can discuss, dialogue, and deliberate together. We need to create a critical mass of people who are willing to see development in the faith perspective. Once we do this, we should be able to tell the world that these two factions of society are willing to work together to alleviate the poverty of the two billion poor people in the world. There is no room for skepticism and mistrust. Religious leadership needs to be told that being secular does not mean being anti-religion.

Promoting faith-inspired organizations that are helping the poor and introducing them to the international development community is important. We need to promote those organizations that are not restricting services to their own faith or those that do not have a hidden agenda. For example, there are missionary or church-based organizations in Pakistan, and I am happy to see that these organizations are highly respected and well regarded. They do not serve their own community only. They serve the entire Pakistani community. If we promote such organizations we can build the bridges and set examples.

I saw that Akhuwat grants loans for education. What are the education challenges facing Pakistan, and how have you faced them?

Education in Pakistan is riddled with neglect and confusion. There are three systems of education that are operating in the country. There are English medium schools for the privileged and the rich. Then there are government schools where the language of instruction is Urdu and where the poor people send their children to get education. Naturally, these students are unable to compete with the graduates from the English schools. The third system is the madrasa system where the children of the poorest of the poor attend school. These schools appeal to the poor families because they provide food for the children, and parents are relieved from the stress of feeding a child two meals a day. There is also the added benefit that the child is receiving a religious education.

Those who emerge from these three streams do not have a fair understanding of the others. They live in different worlds. They have different aspirations, different dreams. So, how does one go about trying to make three types of people converge together? How can you make these three sections of society into a one cohesive nation? This is the challenge that is facing the Pakistani education system. We need to bring these three systems closer to each other. Obviously it cannot be done in one day. But the state, international community, and NGOs should try to encourage reform in madrasa education. The government schools and English medium schools need reform too. The curriculum is outdated, teachers lack capacity and motivation, and there is a scarcity of teaching and learning materials. The goal should be to develop a single system of education so that every Pakistani child should have the access to reach his/her full potential through education. No doubt it will be an arduous and painful process because change is always painful. It will also take a long time as injustices bred over centuries cannot be removed in a short span of time.

We should encourage students from the private elite institutions to visit the government schools and the madrasas and vice-versa so that they become aware that there is also a world beyond their own world. Students from each system who are confined to their spheres must be made aware of each other. We need to form relationships between the students and teachers and the parents of these students so that we may bridge this gap. We also need support and commitment from political leadership to bring about reform to make a single inclusive education system. It would require tremendous resources, both human and financial. It will also need persistence and perseverance. This is the real challenge.

What are the primary gender challenges today in Pakistan? What are the faith dimensions of those challenges? How does Akhuwat work to address gender inequities?

In our lending program, 33 percent of the loans go to women. We have never refused a loan application on the basis of gender. We are gender sensitive in terms of employees, donors, volunteers, and beneficiaries. We believe that men and women both should be able to have access to the services we offer, and we derive this value from faith. Islam does define roles for both genders, but it does not discriminate on the basis of gender. However, gender discrimination in Pakistani society cannot be denied, especially in the rural areas. This has, however, nothing to do with religion; it is an evil rooted in our tribal and feudal culture.

For example, Islam prescribes clear rules about inheritance. But in the villages women are unable to get their share in the inheritance and other benefits because of the gender limitations that are related to tribal culture. In rural society it is very difficult for a woman to obtain divorce, yet in the Islamic faith, there are rules safeguarding women’s right to divorce. Women in rural areas are marginalized and discriminated against despite the fact that this is contrary to religious teachings. Islam says that education is the right of every person, male and female without discrimination; however, in feudal societies like ours, the women are not allowed to get education. The feudal tradition is communicated to the women usually through religious leaders, and feudal cultural restrictions are thus misinterpreted as religious restrictions. We have to see it in the right perspective. Religion does not take rights away from women; the basis of gender discrimination in Pakistan hinges on tribal tradition.

How did faith-inspired organizations respond to recent humanitarian crises in Pakistan, including internal displacement due to conflict, and the recent flooding in the country?

We have been victims of great crises in the past few years. Yet we have emerged stronger. You will appreciate how resilient our society is and how well we are adjusting to these challenges. The major support for the downtrodden and the victims of the flood and the earthquake has come from faith. People in Pakistan help their brothers and sisters because they are inspired by faith, whether they are Muslims, Christians, Sikhs, or Hindus. The role of faith-based organizations, though, was limited, yet the inspiration mostly came from faith.

Looking specifically at the Pakistani context, faith, in varying forms and manifestations, plays a large role in most segments of society, and provides inspiration to many working for social good. That said, do you see a clear distinction between organizations inspired by faith, and those that are outwardly secular in name, or is a more nuanced understanding necessary? I have heard comments suggesting the latter.

The end goal of each organization is the same. Faith-inspired organizations and secular organizations both intend to bring development to the people; in terms of objectives there is very little difference. The difference is in operational methodology. Faith-inspired organizations try to engage religious ideals, religious leaders, religious teachings, and ethics. Religious tradition is their legacy and reward hereafter is their motivation. Whereas the secular organizations leave out the religion and religious institutions, and therefore they, despite their best intentions, fail to engage a large majority of the society. To some extent both are limiting their scope. This is not inclusive development. This is against the principles of participation. We need to transcend prejudices and rise above personal likes and dislikes. Embracing adversaries is the real spirit of religion. Forgiveness and friendship is the hallmark of true faith.

As I said, I do believe that the ultimate goal of each organization, whether faith-inspired or secular, is the same, that is, to bring development to the poor. The need here is to bridge the gap and build alliances. The problems of the poor are multidimensional. These problems can only be solved through creative and concerted efforts. I know many people who work on both sides of this divide. To me, this divide is arbitrary and artificial. I firmly believe in the innate goodness of people. We all want to eliminate poverty and build a society that provides equal opportunities to the rich and the poor. Our world is already suffering from too many divides; let’s see development as a joint endeavor of the people, by the people and for the people. Let’s not succumb to another division. Let’s make this world a happy place to live in.