Importance of Qarż-e-Ḥasana and Strategy of Akhuwat Foundation for Elimination of Poverty: Analytical Study

قرض حسنہ کی اہمیت اورغربت کےخاتمےکےلیے اخوت فاؤنڈیشن کا لائحہ عمل:تجزیاتی مطالعہ

Abstract

This analytical study explores the significance of Qarż-e-Ḥasana (interest-free loans) as an effective tool in poverty alleviation, with a particular focus on the Akhuwat Foundation's pioneering model. Founded in 2003 by Dr. Amjad Saqib, Akhuwat Foundation is one of Pakistan's foremost social enterprises dedicated to offering interest-free microloans to underprivileged communities. Through a unique financial model based on Islamic principles of compassion, social justice, and brotherhood, Akhuwat aims to empower individuals economically without the burden of interest, thus promoting financial inclusion and self-reliance. This study investigates the foundation’s strategy, which includes extending interest-free loans, fostering small businesses, and investing in social services such as healthcare and education. The research demonstrates how Qarż-e-Ḥasana facilitates poverty reduction by helping beneficiaries build sustainable livelihoods, creating a multiplier effect in local economies. Furthermore, the analysis highlights the Foundation’s success in generating community trust, encouraging timely repayments, and reinvesting funds back into the community, thus creating a self-sustaining financial ecosystem. By examining Akhuwat's impact on poverty levels across Pakistan, this study sheds light on the broader applicability of interest-free microfinance as a viable model for poverty alleviation and economic development in other parts of the world.