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Improving Socio Economic Lives of Deserving Masses of Society
20
10
Imp
act
Ass
essm
ent
of
Mic
rofi
nan
ce
Impact
Assessment of
Microfinance:
A Case Study
of Akhuwat
Ather Azim Khan
Syed Hussain Haider
Muzaffar Asad
Research and Development
Centre Faculty of Commerce
University of Central Punjab
a
Message from Chairman Board of Governors
Akhuwat, an interest free microfinance NGO is an inspiring experience, which has not only
infused great interest among various financial circles of local community but has also gained
tremendous admiration from the global academic institutions and microfinance organizations.
Philosophy of Akhuwat is the true reflection of Islamic teachings of Qarz-e-Hasna (helping
someone in need with interest free loan) which is preferred by all means over charity. Akhuwat
has commendably targeted the class of society, which is haunted with all kinds of misfortunes
like massive pockets of poverty, unemployed youth, illiteracy, widespread corruption, gender
inequality, skyrocketing prices of commodities, lack of access to basic amenities and socio
economic stratification.
It is critical for MFIs, particularly those working with very poor and vulnerable clients, to be
sensitive to the impact of their work particularly to the potential negative impacts that their
services may produce. An MFI should know that it is having a positive impact or, at the very
least, that it is not having a negative impact on some people. All MFIs have knowledge about
how their work affects their clients, but this knowledge is often not formalized.
I would like to facilitate the faculty and volunteer students of Faculty of Commerce, University
of Central Punjab for executing this unique exercise and for conducting this comprehensive
Impact Assessment study of Akhuwat. University of Central Punjab cherishes its social
relationship with Akhuwat and looks for mutually reinforcing its commitment to the betterment
of Pakistan through corporate social responsibility.
Mian Amer Mahmood
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT b
Message of Executive Director Akhuwat
Akhuwat is dedicated to improve the lives of the poor; those who are financially abused,
abandoned and disregarded by society. As a registered NGO, Akhuwat provides the poor with
interest free loans so that they may acquire a livelihood and the skills and support they need to
reach their full potential. In this regard, to highlight the achievements of Akhuwat and to check
the impact of Akhuwat on the lives of its beneficiaries, University of Central Punjab conducted
an impact assessment survey. University of Central Punjab undertook the initiative to conduct a
comprehensive impact assessment of microfinance taking the case of Akhuwat. An impact
assessment team was constituted by the university, which was assigned this challenging task.
Based upon primary data and survey of the Akhuwat beneficiaries an impact assessment report
was developed, which showed the performance of Akhuwat. All the contents of the study and
survey have been incorporated in this report.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT c
Message from Dean Faculty of Commerce
An impact assessment of microfinance is a research study that measures how the services of
microfinance institutions impact the lives of their clients in areas such as employment, income,
nutrition, education, health, and gender equity. It is a primary tool used to determine the
effectiveness of microfinance as a development intervention.
Significantly, MFIs can also use impact assessment as a management tool to improve operational
efficiency, product design, and social effectiveness. Assessments vary depending on the type of
microfinance institution, its mission and the objectives. It seeks to accomplish the type of
information required and cost considerations.
May God bless Dr. Amjad Saqib, a man with a diamond heart and influencing commitment, the
Executive Director of Akhuwat, who is running this institution with an extraordinary missionary
spirit. All those associated with this organization have been working with great zeal and
enthusiasm and they deserve the thanks and blessings of our society. I would also like to
commend and appreciate the contribution and efforts of Prof. Ather Azeem Khan, Prof. Syed
Hussain Haider, and Prof. Muzaffar Asad in the entire Impact Assessment of Akhuwat. It is
important to mention the input of Muhammad Bilal Akhtar, Muhammad Usman Javaid, Nabeel
Waseem, Abubakar Cheema, Muhammad Usman Shafique, Muhammad Shah, Atif Ali, Rohail
Iftikhar, Nazir Hussain, Hassan Aftab, Fakhar Islam, Benish Awais, Rizwan Hameed, Adeel
Athar, Abdul Rahim, Hassan Zafar, and Adeel Waheed. The support of the members of Faculty
of Commerce is also appreciated. The continued guidance and encouragement of Mian Amer
Mahmood (Chairman Board of Governors, UCP) and Prof. Sohail Afzal (Executive Director
Punjab Group of Colleges) has been the spirit behind the work executed by the Faculty of
Commerce.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT d
Table of Contents
Sr. No. Particular Page No.
1 Message from Chairman Board of Governors, UCP a
2 Message from Executive Director Akhuwat b
3 Message from the Dean of Commerce, UCP c
4 Table of Contents d
5 Executive Summary 1
6 Introduction 2
7 Microfinance 3
8 Difference between Microfinance and Micro Credit 4
9 Different Micro Finance Models of the World 5
10 Bangladesh Micro Finance Model (Grameen Bank) 5
11 Methodology of Grameen Bank 5
12 Credit Delivering System 6
13 Kenya Micro Finance Model (One Acre Fund) 8
14 Methodology 9
15 Program Model 10
16 Indian Micro Finance Model (Swayam Krishi Sangam) 11
17 Methodology of Swayam Krishi Sangam 11
18 Kinds of Loans & their Methodology 14
19 Akhuwat Model 16
20 Methodology of Akhuwat 17
21 Loan Products 21
22 Impact Assessment 23
23 Unit of Impact Assessment 23
24 Objectives of Impact Assessment 24
25 Research Methodology 24
26 Selection of Respondent 25
27 Survey and Questionnaire 25
28 Data Analysis 26
29 Wilcoxon Test 70
30 Conclusion 72
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 1
Executive Summary
In the current era microfinance institutions and micro financing is becoming a very important
tool of development strategies for poverty alleviation. Despite of the importance of microfinance
institutions and microfinance programs its importance and impact are partial and contested. This
research study has tried to find out the impact of Akhuwat a microfinance institution over the life
of its beneficiaries. This research presents the findings of a regional level impact assessment of
Akhuwat in Punjab. The study aims to assess on a regional scale the outreach and development
impact of Akhuwat activities in the life of its beneficiaries. In this study the borrowers of
Akhuwat from different cities of Punjab have been taken and were interviewed regarding their
social and economic life before the intervention of microfinance and after the intervention of
microfinance from Akhuwat. The results have shown that the beneficiaries of Akhuwat have
benefitted a lot from the financing that they have got from Akhuwat. The lives of beneficiaries
changes and they got a social as well as economic empowerment. The campaign of before and
after taking loans from Akhuwat was conducted in the following areas.
Girls attending school, head of family income, total family income, eating meat, eating fruit,
servants, falling sick, medical treatment, visit of relatives, behavior of relatives, relatives and
friends lends you money, lent money to your friends and relatives, family and friends invitation
on functions, family and friends involves you in solving issues and problems, involvement of,
women in your family decisions, members of any community in any society, daily travel,
personal vehicle, own house, physical condition of house, entertainment.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 2
1. Introduction
Microfinance programs and institutions have become increasingly important components
of strategies to reduce poverty or to promote micro and small enterprises. However, knowledge
about the achievements of such initiatives remains only partial and contested. The assessment of
microfinance programs remains an important field for researchers, policymakers, and
development practitioners. This research study reviews the methodological options for assessing
the impact of such programs. It views impact assessment as being ‘as much an art as a science’.
Econometricians and statisticians are particularly concerned with this field.
Microfinance is considered as an important tool for alleviating poverty. The potential for
reaching and assisting low-income households in meeting their basic financial needs, for
protecting against risks, and for developing social and economic empowerment on a sustainable
basis have precipitated donor funding into microfinance in the late 90’s causing the sector to
expand rapidly. Akhuwat is providing financial services to the poor. Akhuwat operates under a
corporate mission of poverty reduction. Akhuwat has allocated increasing amounts of funding to
microfinance on this basis. Microfinance programs have burgeoned in many developing
countries as part of their efforts to reduce poverty. The portion of poor clients served by
microfinance institutions has been rapidly growing at a rate of 25 to 30 percent annually over the
last five years.
Despite its rapid expansion, the effectiveness of microfinance in achieving its potential
has always been put into question. The scarce reliable data on the impact of direct access to
financial services on income, expenditure or wealth of poor households hinder attempts at
deriving a clear conclusion on the matter. One reason is that the effect of accessing financial
services can have multiple and cross-cutting effects on poverty; these effects are hard to isolate
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 3
and determine direct causal relationships. The impact of anti-poverty measures is often not
immediately apparent, sometimes necessitating an intergenerational study of the impact on
households. That’s why this survey has been conducted again after two years and as a result
significant improvement has been seen.
The scarcity of data or the difficulty of undertaking comparative studies on the impact of
microfinance in alleviating poverty should not be an excuse to neglect the impact evaluation of
specific microfinance programs. Assessing the social impact of microfinance is vital in
determining whether established microfinance programs achieve the desired outcome. Thus, for
the different stakeholders in the microfinance industry, impact assessment has become a
necessity. Donors want to be assured that their resources are being used for the intended
objective and emphasize the importance of impact assessment to evaluate the social return on
their investment. For microfinance institutions social impact assessments enable them to draw
out strategic management information to better orient them for improved financial performance.
Concrete and available information about the impact of microfinance and specific services
provided by Akhuwat on household income and risk management enables clients to make
informed decisions about range of credits they need.
1.1 Microfinance
Microfinance is often defined as financial services for poor and low-income clients. In
practice, the term is often used more narrowly to refer to loans and other services from providers
that identify themselves as Microfinance Institutions (MFIs). These institutions commonly tend
to use new methods developed over the last 30 years to deliver micro loans to unsalaried
borrowers, taking little or no collateral. These methods include group lending and liability, pre-
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 4
loan savings requirements, gradually increasing loan sizes and an implicit guarantee of ready
access to future loans if present loans are repaid fully and promptly.
More broadly, microfinance refers to a movement that envisions a world in which low-
income households have permanent access to a range of high quality financial services to finance
their income-producing activities, build assets, stabilize consumption and protect against risks.
These services are not limited to credit but include savings, insurance and money transfers.
1.2 Difference between Microfinance and Micro Credit
The term microcredit is used for such loans that are given to unsalaried masses of the
society with little or no collateral. Currently, the credit provided to salaried workers based on
automated credit scoring is not termed a microcredit. Microfinance typically refers to
microcredit, savings, insurance, money transfer and other financial products targeted at poor and
low income level group.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 5
2. Different Microfinance Models of the World
There are different models of Microfinance used in the world. Each model has its own
strength and mainly tailored for a particular society and economy. Some of the models have the
strength to be used in the whole world; in different circumstances and conditions. Here a
comparison of some popular Microfinance program is provided here.
2.1 Bangladesh Microfinance Model (Grameen Bank)
Grameen Bank has reversed conventional banking practice by removing the need for
collateral and a banking system based on mutual trust, accountability, participation and
creativity. Grameen Bank provides credit to the poorest of the poor in rural Bangladesh, without
any collateral. At Grameen Bank, credit is a cost effective weapon to fight poverty and it serves
as a catalyst in the overall development of socio-economic conditions of the poor who have been
kept outside the banking orbit on the ground that they are poor and hence are not bankable. Prof
Muhammad Yunus, the founder of "Grameen Bank" reasoned that if financial resources can be
made available to the poor people on appropriate and reasonable terms and conditions then
“these millions of poor people with their millions of small pursuits can add up to create the
biggest development wonders in the society as of June, 2011, it has 8.37 million borrowers, 97%
of whom were women. With 2,565 branches, Grameen Bank provides services in 81,379
villages, covering more than 97% of the total villages in Bangladesh. Its positive impact on poor
and formerly poor borrowers has been documented in many independent studies carried out by
external agencies including the World Bank, the International Food Research Policy Institute
(IFPRI) and the Bangladesh Institute of Development Studies (BIDS).
2.2 Methodology
Grameen bank sets up a branch with a branch manager and a number of center managers
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 6
to cover an area of about 15 to 22 villages. The manager and the workers start by visiting
villages to familiarize themselves with the local milieu in which they will be operating and
identify the prospective clientele, as well as to explain the purpose, the functions, and the mode
of operation of the bank to the local population. Groups of five prospective borrowers are
formed; in the first stage, only two of them are eligible for, and receive, a loan. The group is
observed for a month to see if the members are conforming to the rules of the bank. Only if the
first two borrowers begin to repay the principal plus interest over a period of six weeks, the other
members of the group become eligible for a loan. Because of these restrictions, there is
substantial group pressure to keep individual records clear. Thus, the collective responsibility of
the group serves as the collateral of the loan.
Loans are small, but sufficient to finance the micro-enterprises undertaken by borrowers:
rice-husking, machine repairing, purchase of rickshaws, buying of milk cows, goats, cloth,
pottery etc. The repayment rate of loans is currently – 95% - due to group pressure and self-
interest, as well as due to high motivation level of borrowers. Although mobilization of savings
is also being pursued alongside the lending activities of the Grameen Bank, most of the latter's
loan-able funds are increasingly obtained on commercial terms from the central bank, other
financial institutions, the money market and from bilateral & multilateral aid organizations.
2.3 Credit Delivery System
Grameen Bank credit delivery means giving loans to the very poor in their villages by
means of the essential elements of the Grameen credit delivery system. Grameen Bank credit
delivery system has the following features:
2.3.1 Main Focus
The organization has a unique system through which they screen out those people who do
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 7
not lie in the category of poorest of the poor and thus, true poor clients are targeted. Another
importance is given in delivering the loan to the poor women of the country. The whole system is
basically developed to enhance the socio economic development of the poorest of the poor
women of the society.
2.3.2 Group Lending
The organization basically lends in groups this characteristic helps in group participation
and group participatory interaction. The system of Grameen bank is to make a foundation of five
members and federating them into centers stress from the start is to strengthen the organizational
customer, so that they can learn the skills of planning and implementation of development
decision. The centers are functionally linked to the Grameen bank, whose field workers have to
attend the center each week.
2.3.3 Special Loan
These include very small loans given without any guarantee. Loans are repayable in
weekly installments spread over a year. Eligibility for a subsequent loan depends upon
repayment of first loan, individual, self chosen, quick income generating activities which employ
the skills that borrowers already posses, close supervision of credit by the group as well as the
bank staff, stress on credit discipline and collective borrower responsibility or peer pressure and
special safeguards through compulsory and voluntary savings to minimize the risks that the poor
confront.
2.3.4 Customer’s Basic Needs
This is shown in the sixteen decisions adopted by Grameen borrowers. It helps
to increase the social and political consciousness. Grameen bank has recently organized a
group to focus more and more women from the poorest households. The urge for survival of
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 8
such women has much greater impact on the development of the family to facilitate their
monitoring of the social and physical infrastructure projects. These social and physical
infrastructure projects include housing, sanitation, drinking water, education, family planning,
etc.
2.3.5 Delivering of Resources to Clients
The system has evolved gradually through a structured learning process that includes
testing, errors, and constantly adjustment is required for an operational system. The special
training is provided for the development of highly motivated employees in the decision-making
and operational authority. Operational authority has been gradually decentralized and
administrative functions are delegated to the zonal level.
2.3.6 Expansion of Loan to Meet Needs of the Poor
Since the overall lending program gathers momentum and borrowers access to credit
discipline, other loan programs have been introduced to meet growing social and economic
development needs of the clients. Besides housing, such programs include credit for building
sanitary toilets, credit for installation of tube-wells that supply drinking water and irrigation for
kitchen gardens, credit for seasonal cultivation to buy agricultural inputs, loan for leasing
equipment / machinery. Grameen bank also finances projects undertaken by the entire family of
a seasoned borrower.
2.4 Kenya Microfinance Mode (One Acre Fund)
One Acre Fund is a nonprofit organization started in January 2006 with the goal of
completely rethinking how to solve the chronic hunger problem in Africa. Food aid is at best just
a temporary solution, and instead has to put together a permanent solution. Proven investment
package for farmers and their families, help them to double farm income because of provision
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 9
seeds and fertilizer, weekly farm education, and market access. This investment package is the
core of the program. Since founding of the organization has expanded to serve 54,000 families in
10 districts in Kenya and Rawanda.
One Acre Fund is an organization that aims to help poor East African farmers who
emerge from persistent poverty and hunger by increasing their farm-based incomes. They do this
by introducing more profitable crops and farming techniques to farmers and by providing
farming inputs in exchange for a share of future revenues. Unlike most interventions designed to
improve farming incomes in poor settings, One Acre Fund facilitates activities and transactions
at each level of the farming value chain, from organizing farmer groups to negotiating with
export markets.
2.5 Methodology
One Acre Fund utilizes a market bundle to help subsistence farmers in Sub-Saharan
Africa grow themselves out of poverty. The market bundle is made up of five components.
First, One Acre Fund identifies existing local farmer groups with an interest in
working together to increase their farming incomes.
Second, One Acre Fund provides the farmer groups with agricultural education to
improve their farming techniques and knowledge of how to grow more valuable
crops.
Third, One Acre Fund distributes planting materials and fertilizers to the farmer
groups. Generally, these are farming inputs that these farmers would not use
because the up-front investment costs are too high.
Fourth, One Acre Fund facilitates the collection and sale of its farmers, crops. A
portion of the revenue is retained by One Acre Fund to cover the cost of the
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 10
capital investments and farmer education; the remainder is distributed to farmers
based on their individual contributions to the harvest.
Finally, One Acre Fund offers its farmers crop insurance to mitigate the risks of
drought and disease.
2.6 Program Model
Markets are used to eradicate hunger permanently. One Acre Fund is concentrated on
one-acre subsistence farmers in Sub-Saharan Africa – one of the largest groups of forgotten poor
in the world. One Acre Fund provides a complete, functioning market system. Thus, making it
possible for even the poorest and most rural farmer to generate more income, and permanently
solve their hunger problem.
2.6.1 Empower Local Group
The first component of the "market bundle" is to empower local groups of farmers. One
Acre Fund finds existing self-help groups (mostly made of women farmers). This group brings
farmers together and makes it possible for them to economically interact with markets.
2.6.2 Farm Education
The second piece of the "market bundle" is farm education, provided by the field officer.
One Acre Fund takes the latest practices from top academic agronomists and translates that into
simple easy-to-understand lessons.
2.6.3 Capital
The third piece of the "market bundle" is capital, environmentally-sensitive planting
materials and fertilizer. Planting materials of the organization have shown a significant
improvement in production. Commercial seed is professionally graded, stored, and selected.
Fertilizer provided by the organization is badly-needed nutrient to soil that has been stripped bare
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 11
over decades of poor management.
2.6.4 Connection with Harvest Markets
The fourth component of the "market bundle" is connection with harvest markets. The
organization acts as a bulk-selling agent. Thus, allowing its members to access much higher
prices of the market. This cash creates a savings-and-investment cycle that leads to self-driven,
permanent growth out of hunger.
2.6.5 Crop Insurance
The final component of the "market bundle" is crop insurance. It is estimated that only
0.3% of poor of Africa are insured in any way. One Acre Fund has pioneered a crop insurance
product that pays farmers in the event of a significant drought or disease.
2.7 Indian Micro-Finance Model (Swayam Krishi Sangam)
Swayam Krishi Sangam Microfinance was founded in 1997 by Dr. Vikram Akula. As of
January 31, Swayam Krishi Sangam reached 500,000 clients throughout India. As of March
2006, Swayam Krishi Sangam had a gross loan portfolio of USD 20,596,150 total assets of
26,814,820, a return on assets of 2.80% and a debt to equity ratio of 636.06%. Micro-Credit
Ratings International Limited (M-Cril), a rating agency of microfinance, gave Swayam Krishi
Sangam, a rating of alpha.
2.8 Methodology
Swayam Krishi Sangam Microfinance follows the Joint Liability Group Model. The
methodology involves lending to individual women, utilizing five member groups where groups
serve as the ultimate guarantor for each member. Their approach is to provide financial services
at the doorstep of members in villages and urban colonies. This provides convenience to the poor
and helps them in savings in terms of cost and time associated with travelling to mainstream
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 12
banks and enables Swayam Krishi Sangam staff to promptly and fully collect repayments. Their
loans are designed for convenience with small weekly repayments corresponding to cash flows.
Small first loans inculcate credit discipline and collective responsibility. Interest and loan
repayments are simplified for easy comprehension. From village selection to loan disbursal,
Swayam Krishi Sangam follows a clear process in its operations. Details of operational
methodology of the organization are captured below:
2.8.1Village Selection
Before starting operations, the staff of Swayam Krishi Sangam conducts village surveys
to evaluate local conditions of the village. Local conditions include population, poverty level,
road accessibility, political stability and means of livelihood.
2.8.2 Projection Meeting
After a village is selected the organization holds a projection meeting. Swayam Krishi
Sangam staff introduces the community to its mission, methodology and services.
2.8.3 Mini-projection Meeting
The organization holds a mini-projection meeting which is basically a follow-up with
interested women, and direct appeal to those who may not have attended earlier because of
religious, class, caste or gender barriers.
2.8.4 Group Formation
Women form self-selected five-member groups are grouped to serve as guarantors for
each other. Experience has shown that a five-member group is small enough to effectively
enforce group peer pressure and, if necessary, large enough to cover repayments in case a
member needs assistance.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 13
2.8.5 Compulsory Group Training (CGT)
Compulsory group training is a four-day process consisting of hour-long sessions
designed to educate clients on Swayam Krishi Sangam processes and procedures. This training
also builds a culture of credit discipline. Using innovative visual and participatory teaching
methods, Swayam Krishi Sangam staff introduces clients to the financial products and delivery
methods. Compulsory group training also teaches clients about the importance of collective
responsibility. They teaches how to elect group leaders, how to affix signatures, and a pledge that
serves as a verbal contract between Swayam Krishi Sangam and its members. During this
training period, Swayam Krishi Sangam staff collects quantitative data on each client to ensure
that qualification requirements are met. It also helps to record base-line information for future
analysis. On the fourth day, clients take a “Group Recognition Test” conducted by a different
staff member than the one who trained them. If they pass, they are officially accepted as Swayam
Krishi Sangam members.
2.8.6 Center Meetings
As additional groups are formed within a single village, a Centre (Sangam) emerges.
During centre formation, groups are combined to form a centre of 3 to 10 groups or 15 to 50
members. Weekly Centre meetings serve as a time to conduct financial transactions. Meetings
are held early in the morning, so as to not interfere with clients’ daily activities. A leader and
deputy leader are selected to facilitate meetings and ensure compliance with Swayam Krishi
Sangam procedures. In addition to financial transactions, members use the weekly meetings to
discuss new loan applications and community issues. Centre meetings are conducted with rigid
discipline in order to sustain the environment of credit discipline created during Compulsory
group training.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 14
2.9 Kinds of loans & their Methodology
2.9.1 Proprietary Products
2.9.1.1 Income Generation Loans (IGL)
The organization gives loans ranging from (Rupees1) Rs. 4,000 to Rs. 10,000 for the first
loan. Then the subsequent loan amount is determined by past credit history and increased each in
set increments up-to a maximum of Rs. 26,000. Term of the loan is 50 weeks with principal and
interest payments due on a weekly basis. 12.5% flat interest rate / 24.55% annual effective
interest rate. The organization provides self-employed women financial assistance to support
their business enterprises, such as raising livestock, running local retail shops called kiranastores,
providing tailoring and other assorted trades and services.
2.9.1.2 Midterm loan (MTL)
The organization provides midterm loans. The amount of these loans ranges from Rs.
2,000 to Rs. 14,000 in each annual cycle. These loans are available any time after the completion
of 20 weeks & before 40 weeks of an income generation loans cycle.
2.9.1.3 Mobile Loans
The organization also provides financing for mobile phones and telephone services. The
range of such loans amounts from Rs. 1,500 to Rs. 3,000 at 26.14% annual effective interest rate
and loan processing fee of 1%. The term of the loan is 25 weeks.
2.9.1.4 Sangam Store Loans
The organization gives working capital loans. These loans ranging from Rs. 1,000 to Rs.
12,500 are interest free loans. The term of the loan is 14 days.
1 Here Rupees are Indian Rupees
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 15
2.9.1.5 Housing Loans
The organization gives housing loans. These loans range from Rs. 50,000 to Rs. 150,000.
Then members have to complete at least three Income generation loans cycles to qualify or one
ILP has to be completed. Term of loan is three to five years with principal and interest payments
due on a monthly basis. 11.9% flat interest rate or 21 % annual effective interest rate is being
charged by the organization. In addition, loan processing fee of 2% collected upfront. The
organization provides financial access to women for construction of new houses or improvement
& extension of existing houses.
2.9.1.6 Funeral Assistance
The organization also gives a funeral assistance of Rs.1000. This assistance is given only
to those members who have paid insurance premium. This assistance is provided to family of the
member if the organization receives information within 14 days of death. This amount is
adjusted in the final payout of the principal amount.
2.9.1.7 Gold Loan
The organization also gives gold loans. These loans range from Rs. 2,000 to Rs. 100,000.
Nature of loan can be Bullet and tenure can be opted up-to 12 months. Annual effective interest
rate ranges from 12 to 30%, depending on the percentage of disbursement opted to net weight of
gold jewelry. Membership fee of 0.5% on the first loan disbursed to non members. The
organization provides personal or business loans to the members and non -members secured by
gold jewelry to meet their short term liquidity requirements.
2.9.2 Distributor products
2.9.2.1 Life insurance
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 16
The organization charges weekly payment of Rs. 20 for the term of five years. Upon
death, the organization disburses to the beneficiary the full sum assured of Rs. 5,000 plus the
account value, which is equal to the aggregate of the premiums paid plus interest accrued, if any,
less any charges for the administration of the policy. In the event the death is deemed an
accidental death, the beneficiary receives Rs. 10,000 plus the account value. Upon maturity in
five years where no death has occurred, the organization disburses to the policyholder the
account value.
2.10 Akhuwat Model
Akhuwat was established in 2001 with the objective of providing interest free micro
credit to the poor so as to enhance their standard of living. The organization started with a first
loan of Rs. 10,000, which was given to a widow. This brave lady did not believe in charity hence
she asked for Qarz-e-Hasna. She purchased two sewing machines and started a small boutique in
her house. She worked so hard that in six months she returned the loan. During this period she
also ran her house and married one of her daughters. That was the beginning of what later
became a movement.
Akhuwat is dedicated to improving the lives of the poor; those who are financially
abused, abandoned and disregarded by society. As a registered non-governmental organization,
Akhuwat provides the poor with interest-free loans so that they may acquire a livelihood and the
skills and support they need to reach their full potential. To this end, Akhuwat raises its funds
from Civil Society. It does not depend on international funding; instead it uses the spirit of
volunteerism and the tradition of giving, a cardinal principle of all religions.
Akhuwat derives inspiration from the Muslim spirit of Muakhaat or brotherhood. The
earliest example of Muakhaat was first displayed by the citizens of Madina at the dawn of Islam,
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 17
when they shared their wealth with the immigrants or Muhajirin of Mecca. Akhuwat’s
philosophy is based on the principle of Qarze-e-Hasna, helping someone in need with interest-
free loans, which is favored over charity. From a first loan of Rs. 10,000, Akhuwat’s total
disbursement has now increased to more than Rs. 1.1 billion in just over nine years. Akhuwat’s
greatest success is that it has been instrumental in helping 99,844 families move from being
dependent on others to being self-sufficient. The success stories of these people bring hope to
those still in need of help.
Akhuwat started its operations in Lahore and to date has fifteen branches in this city. It
has also expanded to Rawalpindi and Faisalabad in collaboration with the Chambers of
Commerce and Industry and philanthropists of these two cities. Besides these big cities it has
opened branches in other cities like Bahawalpur, Multan, Gujrat, Dera Ghazi Khan, Khanewal,
Rajanpur, Nowshera, Peshawar and Karachi. Akhuwat has also expanded its programme in small
cities and towns like Mansehra, Sahiwal, Miani, Kot Momin (Sargodha), Chiniot, Dijkot,
Samundari, Lodhran, Jehanian, Duniyapur, Nain Sukh, Chunian, Changa Manga (Kasur), Choti
Zaireen (Dera Ghazi Khan), Chak Madressah (Bahawalnagar), Sheikhupura, Toulamba, Jampur,
Kot Mithan and Khairpur(Sindh). Few more branches are under process in Mardan and
Farooqabad. Akhuwat’s model is also a part of curriculum at University of Southern New
Hampshire USA, Lahore University of Management Sciences (LUMS) and university of central
Punjab (UCP). All this has been made possible because of the tireless efforts made by our
dedicated staff. Akhuwat sincerely appreciates and is grateful to hundreds of individuals and
families who have donated money, time and skills to this cause.
2.11 Methodology
Akhuwat provides the economically poor with interest free loans so that they may acquire
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 18
a self-sustaining livelihood. It also provides the skills and support they need to actualize their full
potential and abilities. Since its inception Akhuwat has solely relied upon the philanthropists in
extending its services to the community. However, in order to fulfill the increased credit needs of
its ever-increasing clientele it is now willing to work with the international donors as well.
The spirit of volunteerism that Akhuwat’s management and its team member’s exhibit are
indicative of the success Akhuwat achieved within a short span of time.
2.11.1 Family Loans
Family loan is the most common type of loan that Akhuwat offers to its clients for setting
up or expanding a business. Income from this business is jointly shared by the whole family. The
loans given by Akhuwat are co-signed by male and female head of the family. Akhuwat believes
in strengthening family unit as some studies show that separate loans to male and female in a
family may result in tensions in the family and hence may cause disintegration of this important
institution.
2.11.2 Linkages with Mosque and Church
An important and novel idea associated with individual loans is the use of the local
mosque/church infrastructure as the center for loan disbursement and as an avenue for
community participation.
2.11.3 Combination of Individual and Group Lending Program
Diversification of loan portfolio by offering different loan products has helped to increase
the outreach of the organization.
2.11.4 Credit plus approach
Akhuwat has employed a credit plus approach by introducing the idea of social guidance
for its credit beneficiaries. The purpose of this approach is to help borrowers flourish their small
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 19
enterprises so that they can lead socially healthier lives than before.
2.11.5 Program Introduction
Individual loans are marketed through awareness campaign in poor localities, market
places and through previous borrowers. An introduction to the program is also given in nearby
mosque or church when people have congregated there for prayers. This has not only
tremendously saved the operational costs but has also opened the doors of the religious places for
socio-economic development. It also attaches a moral responsibility to return the loan on time.
2.11.6 Individual Selection
The loan process starts with the submission of applications by persons interested in
getting financial assistance. The Unit Manager (Loan Officer) then evaluates that whether the
applicant deserves the loan or not i.e. lives below the poverty line, has a reliable social capital, is
not involved in any illegal business and possesses entrepreneurial abilities.
2.11.7 Preparation of Business Plans
Through the preparation of business plans the business idea of the intended loanee is
evaluated to see if it is viable and whether it can generate income beyond the household expenses
of the individual so that the loan could be repaid easily. The applicant's family is also
interviewed to make sure that they know about the loan and support the business idea.
2.11.8 Credit Appraisal
After initial appraisal by the Unit Manager, the application is forwarded to Branch
Manager who appraises the technical section of the appraisal process. Then the case is referred to
Loan Approval Committee. The committee comprising of Unit, Branch and Area Mangers
reviews the credit cases. If the committee approves the case loan disbursement is done. The
whole process takes almost three weeks.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 20
2.11.9 Guarantors of Loans
Every borrower also provides two individual guarantors who vouch for his/her
credentials and accept the responsibility of monitoring the borrower and give assurance to
persuade the borrower for timely payment of loan. One of the two guarantors may be from the
same family.
2.11.10 Credit Disbursement/Capacity Building
Disbursement takes place 2-3 times a month and 100-150 loans are disbursed at one event
usually held at branch office/mosque or church. Every borrower has to be accompanied by one of
the guarantors. Other people present at the time of disbursement include community members,
Akhuwat staff, from the branch and Head office. Social Guidance events are also held
simultaneously in which the capacity of loanees is built to carry on their work more efficiently
and effectively. Akhuwat is also apprised of social agenda that includes:
Emphasis on girls education
Serving the community at large
Protection and improvement of environment
Importance of plantation
Observance of traffic rules and local laws
2.11.11 Recovery/Follow up
Once a loan is disbursed, the Unit Manager monitors the client with regular visits to his
residence and place of work. The loan repayment has to be submitted at the branch by the 7th of
each month. If a payment is not in by the 10th, the Unit Manager visits the client to remind and if
repayment is still not done then the guarantors are contacted and asked to make the payment.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 21
2.12 Loan Products
2.12.1 Family Enterprise Loan
These loans are given for establishing a new business or expanding an existing one.
Family Enterprise loan is the most common type of loan offered by Akhuwat. It comprises 91%
of Akhuwat's loan portfolio. The Family Enterprise loan varies in the bracket of Rs.10, 000 to
Rs. 30,000, however, most common amount for the first loan is Rs.15, 000. The individual has to
come up with a viable business plan to become eligible for the loan. The Enterprise loan is also
known as the family Enterprise loan because during the period of appraisal and lending the entire
family is involved in the process with the view to make it a family venture instead of individual
effort.
2.12.2 Liberation Loan
It is used for repayment of loans taken from money lender on exorbitantly high interest
rates. This type of loan is given to those who have borrowed money from moneylenders at very
high interest rates. Akhuwat pays the principle amount in one go for the client and then the client
has to pay back the amount in interest free installments to Akhuwat. Range of this loan is up-to
Rs. 40,000.
2.12.3 Education Loan
It is utilized for paying dues (fees) or purchase of books and material of poor students. It
provides education expenses in easy way. Range of education loan is up-to Rs. 25, 000.
2.12.4 Marriage Loan
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 22
Marriage loan is given for dowry of bride (daughter) or marriage ceremony
arrangements. This loan helps in meeting the marriage expenses of a girl of a poor family. Range
of this loan is up-to Rs. 25, 000. Boys are not entitled for such loans.
2.12.5 Emergency Loan
This type of loan is given to meet emergency situations such as school admission fee,
treatment, purchase of medicine, etc. These loans are given to prevent the poor from major
fallbacks. The amount loaned to the poorest of the poor is generally Rs. 5, 000 and this has to be
repaid within one year.
2.12.6 Silver Loan
This is given to increase the size of the existing business. This medium size loan of Rs.
50, 000 is given to those who have successfully completed three or more cycles of borrowing
from Akhuwat and are interested to further expand their business.
2.12.7 Housing Loan
For renovation of house, construction of room, roof, or walls, etc. Range of this loan
varies between Rs. 25, 000 to 70, 000 and has to be repaid within two years time limit. Akhuwat
started this product in collaboration with Al-Noor Umar Welfare Trust, another nonprofit
organization founded by Mr. Khalil Mian, former Chairman of Pakistan Credit Rating Agency
(PACRA).
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 23
3. Impact Assessment
An almost infinite array of variables can be identified to assess impacts on different units.
Conventionally, economic indicators have dominated microfinance impact assessment with
assessors particularly keen to measure changes in income. Other popular variables have been
levels and patterns of expenditure, consumption, and assets. A strong case can be made that
assets are a particularly useful indicator of impact because their level does not fluctuate as
greatly as other economic indicators and is not simply based on an annual estimate.
The social indicators that became popular in the early 1980s like educational status,
access to health services, nutritional levels, anthropometric measures and contraceptive use, have
recently been checked in addition to some newly identified indicators in an attempt to assess
whether microfinance can promote empowerment. This has led to the measurement of individual
control over resources, involvement in household and community decision-making, levels of
participation in community activities and social networks and electoral participation. The bulk of
this work has been focused on changes in gender relations, but there are sometimes partially-
formulated assessments of class relations within it.
While not fully comprehensive, the detailed sets of domains and markers, produced in
their paper provide an excellent checklist for impact assessors that should be considered while
designing the impact assessment instrument. In addition, impact assessors should always seek to
keep the number of variables they measure to a manageable number and not be tempted to go for
a comprehensive approach that will impact adversely on data quality and study relevance.
3.1 Unit of Assessment
Unit of assessment in this study is only the borrower. Occasionally studies have
attempted to assess impact at an individual level, but this is relatively rare and has to take a
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 24
quantitative focus. More recently some studies have attempted to assess impacts at a number of
levels. The Beneficiary Economic Portfolio Model has been used because institutional impact
was incorporated in the community level analysis. It does have the profound disadvantage of
making assessment demanding in terms of costs, skilled personnel and time. If used with limited
resources it risks sacrificing depth for breadth of coverage of possible impacts.
3.2 Objectives of Impact Assessment
Now a days impact assessment studies are becoming more and more important and
popular with donor agencies and as a result, this activity is becoming necessity of recipient
agencies. This term in general is a substitute for evaluation of the performance of the institution.
These are two major objectives of this impact assessment to prove the impact of microfinance
provided by Akhuwat in the life of its beneficiaries and in the social and economic improvement
of the borrowers. There are many factors that are associated with the two goals. Behind the shift
from evaluation to impact there are number of factors. These factors are not explored in this
research study as the primary goal is to find the impact of micro financing in the life of its
beneficiaries. Explicitly, impact assessment is promoted by both the sponsors and implementers
of programs. They can learn what is being achieved, and thus can, improve the effectiveness and
efficiency of their activities. Implicitly, impact assessment is a method by which sponsors seek to
get more information about program effectiveness than is available from the routine
accountability systems of implementing organizations. Impact assessment has also a great
significance to aid agencies in terms of meeting the ever increasing accountability demands from
their governments and for contesting the contradiction of the anti-aid lobby.
3.3 Methodology
In microfinance impact assessment the borrowers who have received the loans for three
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 25
or four times were selected as respondent the people were interviewed about the different
variables, that were chosen as mean of assessment in their life, before the intervention of
Akhuwat in their lives and after the intervention of Akhuwat in their lives.
3.4 Selection of Respondents
Mature borrowers who have been clients of the Akhuwat for more than three years and
continued using the financial services were chosen as respondent on random basis regardless of
the financial position or geographic location.
3.5 Survey and Questionnaire
The survey consisted of following parts:
The first part consisted of the demographics of the respondent
The second part consisted of current position of the respondent
The third art consisted of financial position of the respondent
The fourth part consisted of societal conditions of the respondent
The fifth part consisted of health conditions of the respondent
The sixth part consisted of economic position and economic strength of the respondent
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 26
Data Analysis
Years of association with Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid 2 15 5.0 5.1 5.1
3 81 27.2 27.3 32.3
4 45 15.1 15.2 47.5
5 84 28.2 28.3 75.8
6 57 19.1 19.2 94.9
7 5 1.7 1.7 96.6
8 10 3.4 3.4 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above table mentions the frequency distribution of time period that the borrowers have spent
with Akhuwat the table shows that 3.4% people have been associated with Akhuwat for last eight
years and five percent people are associated with Akhuwat since last two years. The remaining
table shows the same frequencies showing that 27.2% people are associated from last 3 years,
15.1% people are associated with Akhuwat for last 4 years. The above table is briefly explained
in the form of Bar chart which is more easy for he reader to understand the chart is drawn below:
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 27
Marital status
Frequency Percent Valid Percent
Cumulative
Percent
Valid
1 No 29 8.7 8.8 8.8
3 Yes 269 91.3 91.2 100.0
Total 298 100.0 100.0
Total 298 100.0
The above table shows the frequency distribution of marital status of the borrowers associated
with Akhuwat. The table shows that 8.7% borrowers are unmarried while 90.3% borrowers are
married and 1% did not respond to this question. The above table is briefly explained in the form
of Bar Chart, which is easier for the reader to understand the chart is drawn below.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 28
Girls attending school before Akhuwat
Frequency Percent Valid Percent Cumulative Percent
Valid
1 Not sending
School 222 74.7 74.7 74.7
3 Govt. School 74 24.9 24.9 99.7
5 Private
School 1 .3 .3 100.0
Total 297 100.0 100.0
The above table shows the frequency distribution of the girls who were not attending school
before association with Akhuwat. The table shows that 74.7% were not attending school and
24.9% were attending government school and 1% were attending private school. Most of its
borrowers before association with Akhuwat were unable to send their girls to good school.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 29
Girls attending school after Akhuwat
Frequency Percent Valid Percent Cumulative
Percent
Valid
1 Not Sending
School 103 34.7 34.7 34.7
3 Govt. School 137 46.1 46.1 80.8
5 Private
School 57 19.2 19.2 100.0
Total 297 100.0 100.0
The above table shows that after associating with Akhuwat the girls starts attending school and
the percentage of girls who were not attending schools went down to 34.7%. 46.1% girls started
attending government school and 19.2% girls started attending private school. So Akhuwat has
improved the living standard of the borrowers.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 30
Head of family income before Akhuwat
Frequency Percent
Valid
Percent
Cumulative
Percent
500-3,000 48 16.1 16.1 16.1
3,500-7,000 117 39.26 39.26 55.36
7,500-13,000 79 26.51 26.51 81.87
15,000-30,000 54 18.12 18.12 100
Total 298 100 100
The table shows that the income of the borrowers was low before they were not associated with
Akhuwat. The maximum income of the borrowers was 30,000 which is also comparatively low.
90% borrowers’ income was less than 17,000 and also the diagram shows that majority of the
people were earning Rs. 3,000 to 8,000 before associating with Akuwat. Some of them were not
earning even a single penny or were earning 1,000 and very few were earning above 15,000.
Hea
d of
fami
ly
inco
me
befo
re
Akh
uwa
t
500-3,000
3,500-7,000
7,500-13,000
15,000-30,000
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 31
Head of family income after Akhuwat
Frequency Percent
Valid
Percent
Cumulative
Percent
2,000-5,000 18 6.04 6.04 6.04
6,000-9,000 41 13.75 13.75 19.79
10,000-20,000 217 72.82 72.82 92.61
21,000-45,000 22 7.38 7.38 100
Total 298 100 100
The table shows that the income of the borrowers is relatively high after they are associated with
Akhuwat and the maximum income increased to Rs. 45,000. Almost 30% borrowers’ income is
now above Rs. 17,000 and also the diagram shows that majority of people are now earning Rs.
10,000 to 20,000 after associating with Akhuwat. Some of them are still earning less than Rs.
2,000 and very few are earning about Rs. 45,000.
Head of family income after Akhuwat
2,000-5,000
6,000-9,000
10,000-20,000
21,000-45,000
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 32
Total family income before Akhuwat
Frequency Percent
Valid
Percent
Cumulative
percent
1,500-5,000 59 19.8 19.8 19.8
6,000-9,000 65 21.8 21.8 41.6
10,000-20,000 130 43.62 43.62 85.22
21,000-31,000 44 14.76 14.76 100
Total 298 100 100
The table shows that the total family incomes were low when the borrowers were not associated
with Akhuwat. The maximum total family income is Rs. 31,000. Which is comparatively low
and almost 80% borrowers income was below than Rs. 16,000. The diagram also shows that the
majority of the families were earning Rs. 7,000 to Rs. 15,000 approximately before associating
with Akhuwat. Some of these were earning below Rs. 1,500 and very few of these were earning
about Rs. 31,000.
Total family income before Akhuwat
1,500-5,000
6,000-9,000
10,000-20,000
21,000-31,000
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 33
Total family income after Akhuwat
Frequency Percent
Valid
Percent
Cumulative
Percent
3,000-9,000 14 4.69 4.69 4.69
10,000-15,000 147 49.32 49.32 54.01
16,000-22,000 84 28.18 28.18 82.19
24,000-35,000 53 17.78 17.78 100
Total 298 100 100
This table shows that the borrowers’ total family income increased after associating with
Akhuwat. The maximum income increased to Rs. 40, 000 which is comparatively high. More
than 50% borrowers’ income is more than Rs. 19, 000 and the diagram also shows that the
majority of the families are now earning Rs.10, 000 to Rs. 20,000 after associating with
Akhuwat. Some of these still earning about Rs. 3,000 and very few of these are earning Rs.
40,000.
Total family income after Akhuwat
3,000-9,000
10,000-15,000
16,000-22,000
24,000-35,000
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 34
Eating meat before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Once a Month 90 30.2 30.3 30.3
Twice a Month 98 32.9 33.0 63.3
Once a Week 98 32.9 33.0 96.3
Twice a Week 11 3.7 3.7 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table shows that the meat consumption of the borrowers was low before associating with
Akhuwat the borrowers eat meat only a few times in a month. The 30.2% of the borrowers eat
meat only once a month, 32.9% borrowers eat meat twice a month, 32.9% borrowers eat meat
once a week and only 3.7% eat meat twice a week. Remaining 1% did not eat meat.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 35
Eating meat after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Twice a Month 125 41.9 42.1 42.1
Once a Week 147 49.3 49.5 91.6
Twice a Week 15 5.0 5.1 96.6
Once a Month 10 3.4 3.4 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above table mentions that the capacity of the borrowers eating meat has increased after they
are associated with Akhuwat. They started eating meat more times before and the table also
shows that 41.9% of the borrowers started eating meat twice a month and the number of
borrowers eating twice a week increased to 5% which is higher than before.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 36
Eating Fruit before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Once a Month 2 .7 .7 .7
Twice a Month 165 55.4 55.6 56.2
Once a Week 118 39.6 39.7 96.0
Twice a Week 7 2.3 2.4 98.3
Almost Daily 5 1.7 1.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows the fruit consumption of the borrowers before they were associated with the
Akhuwat and maximum consumption was twice a month. The table also shows that the fruit
eating capacity of the borrowers was low before taking loan from Akhuwat. Almost 56% people
used to eat fruit twice a month. Only 1.7% people were able to eat fruit daily.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 37
Eating Fruit after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Once a Month 1 .3 .3 .3
Twice a Month 151 50.7 50.8 51.2
Once a Week 114 38.3 38.4 89.6
Twice a Week 25 8.4 8.4 98.0
Almost Daily 6 2.0 2.0 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above table shows that the fruit eating capacity of the borrowers has increased after taking
loan from Akhuwat. Almost 89% people used to eat fruit once a week it means that because of
Akhuwat people shifted from twice a month to once a week. Another important point is that now
almost the ratio of people who were using fruit daily has been doubled from previous.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 38
Servants before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 274 91.9 92.3 92.3
Yes 23 7.7 7.7 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table shows that to afford a servant are very low before they were associated with the
Akhuwat only 7.7 percent were in a condition to afford servant. The above table shows that
almost 92 % borrowers were not having servants before taking loan from Akhuwat. This shows
the poor economic position of the borrowers before they were not associated with Akhuwat.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 39
Servants after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 220 73.8 74.1 74.1
Yes 77 25.8 25.9 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above table shows that after taking loan from Akhuwat people started to have servants and
now almost 25 percent people are having servants and the percentage of NO has declined from
92 percent to 73.8 percent. This shows that Akhuwat has also increased employment
opportunities for others as well and also making the people in the condition to afford the servant.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 40
Falling Sick before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Once a Month 112 37.6 37.7 37.7
Once in six Month 182 61.1 61.3 99.0
Rarely 3 1.0 1.0 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table shows that how often the borrowers fall sick before they were associated with the
Akhuwat. The table shows that almost 61 % borrowers fell sick once a month. Only 1 % fell sick
rarely. The ratio of falling sick was high because the borrowers were unemployed, they had no
proper food and basic necessities of life. Falling sick is due to stress and lack of proper food.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 41
Falling Sick after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Once a Month 36 12.1 12.1 12.1
Once in six Month 254 85.2 85.5 97.6
Rarely 7 2.3 2.4 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how often people fell sick after they were associated with the Akhuwat. The
above mentioned table shows that after taking loan from Akhuwat almost only 12 % borrowers
fell sick once a month. The people who got sick rarely have shown an increase which is more
than double as compared to previous. So Akhuwat has reduced the stress of the borrowers thats
why they fell sick rarely.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 42
Medical Treatment before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Dispensary 211 70.8 71.0 71.0
Government Hospital 85 28.5 28.6 99.7
Private Hospital 1 .3 .3 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows the affordability of the medical treatment of the borrowers and
the living standard of borrowers before they were attached with the Akhuwat. The table shows
that only 0.3% people were capable of going to private hospitals and even only 28% people were
capable of going to government hospitals. 70 % borrowers were going to free dispensaries.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 43
Medical Treatment after Akuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Dispensary 145 48.7 48.8 48.8
Government Hospital 151 50.7 50.8 99.7
Private Hospital 1 .3 .3 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows the affordability of the medical treatment of the borrowers and
the living standard of borrowers after they were attached with Akhuwat. The table shows that
only 0.3 % people were capable of going to private hospitals which has not shown any increase
but people were capable of going to government hospitals rather than free dispensaries. The
percentage of people who started going to government hospitals has increased to almost 50 %
which shows an improvement in the living standard of the borrowers. Akhuwat has increased the
living standard of the people.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 44
Visit of Relatives before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Never 277 93.0 93.3 93.3
Once a year 20 6.7 6.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how frequently the relatives visit to borrowers before they were not
associated with the Akhuwat and they were not financially strong. The above mentioned table
shows a drastic behavior of our society. The table shows that even relatives did not meet their
poor relatives 93 % people were not visited by their relatives because of their poor economic
conditions. Only 6 % people were visited by their relatives once a year.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 45
Visit of Relatives after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Never 208 69.8 70.0 70.0
Once a year 24 8.1 8.1 78.1
Once in six months 63 21.1 21.2 99.3
Frequently 2 .7 .7 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how frequently the relatives visit to borrowers after they were associated
with the Akhuwat and they were now financially strong. This ratio has decreased to 70 percent
which was previously 93 %. Almost 8 % people were visited by their relative once a year which
has shown an improvement. This is happened just because of Akhuwat and the support of
Akhuwat to the people and by making them financially strong.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 46
Behavior of Relatives before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Dont want to meet 9 3.0 3.0 3.0
Humilating 53 17.8 17.8 20.9
Insulting 8 2.7 2.7 23.6
Show hatred 190 63.8 64.0 87.5
Positive behavior 36 12.1 12.1 99.7
Normal respect 1 .3 .3 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how the relatives behave with borrowers before they were not associated
with Akhuwat. The table shows that even relatives did not respect their poor. 17 % borrowers
were humiliated by their relatives because of their poor economic conditions. 64 % people
showed hatred towards the poor relatives. 12 % people had positive behavior and only 0.3 %
people showed normal behavior.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 47
Behavior of Relatives after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Don’t want to meet 8 2.7 2.7 2.7
Humiliating 7 2.3 2.4 5.1
Insulting 3 1.0 1.0 6.1
Show hatred 11 3.7 3.7 9.8
Unbiased 1 .3 .3 10.1
Positive behavior 112 37.6 37.7 47.8
Normal respect 1 .3 .3 48.1
Respectfully 153 51.3 51.5 99.7
Total 297 99.7 100.0
Total 298 100.0
The table shows that how the relatives behave with our borrowers after they are associated with
Akhuwat. The above mentioned table shows the behavior of our society. The table shows that
even relatives did not respect their poor relatives. This ratio decreased to 2.7 %. 2.4% borrowers
were humiliated by their relatives because of their poor economic conditions. 3.7 % people
showed hatred towards the poor relatives. 37 % people had positive behavior and 51% people
started giving respect to their relatives with the improvement in their economic conditions.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 48
Relatives and Friends Lends You Money before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 206 69.1 69.4 69.4
Yes 91 30.5 30.6 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows that before taking loan from Akhuwat when the economic
condition of the borrowers was low almost 70 % friends and relatives were not helping their
relatives. Only 30% borrowers were helped by their relatives and friends. This shows the
behavior of relatives and friends. They were not ready to lend money to thoses poor borrowers.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 49
Relatives and Friends Lends You Money after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 75 25.2 25.3 25.3
Yes 222 74.5 74.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows that after taking loan from Akhuwat when the economic
condition of the borrowers became better and now only 25 % friends and relatives were not
helping them. Almost 74% borrowers were helped by their relatives and friends because now
their economic position has improved. This shows that the Akhuwat has helped the borrowers
very much because if had made the people financially strong.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 50
Lent Money to Your Friends and Relatives before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 244 81.9 82.2 82.2
Yes 53 17.8 17.8 100.0
Total 297 99.7 100.0
Total 298 100.0
The table mentioned above shows that as the financial position of the borrowers was very weak
before taking loan from Akhuwat. Thus they were not capable of giving loan to their friends and
relatives. Only 17% people were in a position of giving loan to their relatives. Almost 82 %
people were not in a position to help their friends and relatives.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 51
Lent Money to Your Friends and Relatives after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 201 67.4 67.7 67.7
Yes 96 32.2 32.3 100.0
Total 297 99.7 100.0
Total 298 100.0
The table mentioned above shows that as the financial position of the borrowers improved after
taking loan from Akhuwat. After taking loan from Akhuwat the borrowers became capable of
giving loans to their friends and relatives. The percentage increased to 32 % as compared to 17%
before taking loan.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 52
Family and Friends Invitation on Functions before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid No 40 13.4 13.5 13.5
Some times 198 66.4 66.7 80.1
Yes 59 19.8 19.9 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how often the relatives invite our borrowers before they were not associated
with Akhuwat because they were not financially strong. The values show that 13 % people were
not invited by their friends and relatives on their functions, 66% people were rarely invited by
their friends and relatives and only 19% people were regularly invited by their friends and
relatives.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 53
Family and Friends Invitation on Functions after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid No 117 39.3 39.4 39.4
Some times 133 44.6 44.8 84.2
Yes 47 15.8 15.8 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how often the relatives invite our borrowers after they are associated with
the Akhuwat as they are now financially strong. The values show that 39 % people were invited
by their friends and relatives on their functions after the improvement of their financial position.
44% people were rarely invited by their friends and relatives who were not previously invited.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 54
Family and Friends Involves You in Solving Issues and Problems before
Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 48 16.1 16.2 16.2
Some times 184 61.7 62.0 78.1
Yes 65 21.8 21.9 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that the family and friends did not involve our borrowers in solving the issues
when they were not associated with Akhuwat and they were not financially good. The table
mentioned above shows that people were not involving their friends and family in solving issues
and problems when they were poor. Only 21 % people responded that they were involved by
their friends and families in their problem solving.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 55
Family and Friends Involves You in Solving Issues and Problems after
Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 7 2.3 2.4 2.4
Some times 188 63.1 63.3 65.7
Yes 102 34.2 34.3 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that the family and friends now involve our borrowers in solving their issues
because they are now attached with Akhuwat and are financially good. The table mentioned
above shows that people started involving their friends and family in solving issues and problems
when their economic conditions improved and 34 % people responded that they were involved
by their friends and families in their problem solving.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 56
Involvement of Women in Your Family Decisions before Akuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 27 9.1 9.1 9.1
Some times 170 57.0 57.2 66.3
Yes 100 33.6 33.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The table shows that how many women were given the right to get involved in decision making
from our borrowers who were not associated with the Akhuwat at that time. This table shows the
behavior of the borrowers when they were poor and were in the darkness of poverty. The
behavior of people towards the involvement of their women in decision making was not good
due to frustration and tensions. Only 33 % borrowers used to involve their women in decision
making when they were poor.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 57
Involvement of Women in your Family Decisions after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 9 3.0 3.0 3.0
Some times 175 58.7 58.9 62.0
Yes 113 37.9 38.0 100.0
Total 298 99.7 100.0
Total 298 100.0
The table shows that how many women were given the right to get involved in decision making
from borrowers who were now associated with Akhuwat. This table shows the behavior of the
borrowers after their economic position improved. The behavior of people towards the
involvement of their women in decision making became good and almost 38 to 58 % people
started involving their women in decision making when their economic positions improved.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 58
Members of Any Community in any Society before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 218 73.1 73.4 73.4
Yes 80 26.9 15.2 88.6
Total 298 100 100.0
Total 298 100.0
The table mentioned above shows that before taking loan from Akhuwat as the people were tense
and frustrated, they were not involved in any type of membership in the community only 15%
people were the members of any community.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 59
Members of Any Community in Any Society after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Yes 260 87.2 87.5 87.5
No 37 12.4 12.5 100.0
Total 297 99.7 100.0
Total 298 100.0
The table mentioned above shows that after taking loan from Akhuwat as the people came out of
tension and frustration situation they became a part of community membership only 12% people
were left who were not the members of any community.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 60
Daily Travel before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
By walk 130 43.6 43.8 43.8
Government transport 167 56.0 56.2 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table mentioned above shows the travelling pattern of borrowers before taking loan from
Akhuwat. The table shows that almost 43 % people were not in a position even to use public
transport. 56% people were using government transport.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 61
Daily Travel after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
By walk 76 25.5 25.6 25.6
Government transport 92 30.9 31.0 56.6
Private transport 129 43.3 43.4 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table mentioned above shows the travelling pattern of borrowers after taking loan from
Akhuwat. The table shows that almost 25 % people were not in a position to use public transport
even after taking loan from Akhuwat. 31% people used government transport and 43% people
purchased their own vehicle.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 62
Personal Vehicle before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 161 54.0 54.4 54.4
Bi cycle 56 18.8 18.9 73.3
Motor Bike 72 24.2 24.3 97.6
Car 7 2.3 2.4 100.0
Total 296 99.3 100.0
Missing System 2 .7
Total 298 100.0
The table mentioned above shows the possessions of borrowers before taking loan from
Akhuwat. 54% people did not own any transport before taking loan from Akhuwat. 18% people
owned bicycles, 24% people owned motor cycles and only two percent had cars.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 63
Personal Vehicle after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
No 78 26.2 26.4 26.4
Bi cycle 87 29.2 29.4 55.7
Motor Bike 119 39.9 40.2 95.9
Car 12 4.0 4.1 100.0
Total 296 99.3 100.0
Missing System 2 .7
Total 298 100.0
The table mentioned above shows the possessions of borrowers after taking loan from Akhuwat.
26 % people did not own any transport after taking loan from Akhuwat which has decreased
from 54%. 29% people owned bicycles, 40% people owned motor cycles and 4% percent now
own cars. Personal vehicle is very important for good quality life and Akhuwat has made it easy
to get the personal vehicle.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 64
Own House before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Rent 17 5.7 5.7 5.7
Sharing on rent 217 72.8 73.1 78.8
With parents 33 11.1 11.1 89.9
Yes 30 10.1 10.1 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table mentioned above shows the living conditions of the borrowers before talking loan from
Akhuwat. The table shows that 5.7% people used to live in rented houses, 73 % borrowers lived
in joint families, 11% people lived with parents, and almost 10% people owned their own
houses.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 65
Own House after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Rent 20 6.7 6.7 6.7
Sharing on rent 221 74.2 74.4 81.1
With parents 24 8.1 8.1 89.2
Yes 32 10.7 10.8 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The table mentioned above shows the living conditions of the borrowers after talking loan from
Akhuwat which is showing a significant improvement. The table shows that 6.7% people used to
live in rented houses, 74 % borrowers lived in joint families, 8% people lived with parents and
almost 10% people owned houses. This table shows that there is a significant improvement in the
living as people started living independently.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 66
Physical Condition of House before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Bad 20 6.7 6.7 6.7
Normal 221 74.2 74.4 81.1
Fair 24 8.1 8.1 89.2
Good 32 10.7 10.8 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above mentioned table shows the condition of borrowers’ houses before taking loan from
Akhuwat, which was very poor. Even 7% of the borrowers were living in mud houses. Almost
74% of borrowers were living in normal condition houses, and only 10% borrowers were living
in good condition houses. This type of condition of the houses shows the poor economic position
of the borrowers.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 67
Physical Condition of House after Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
Normal 158 53.0 53.2 53.2
Fair 139 46.6 46.8 100.0
Total 297 99.7 100.0
Missing System 1 .3
Total 298 100.0
The above mentioned table shows the condition of borrowers’ houses after taking loan from
Akhuwat, which is improved. 53% of borrowers are living in normal condition houses, and
almost 46% borrowers are now living in good condition houses. It shows that the economic
position of the borrowers improved after taking loan from Akhuwat.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 68
Entertainment before Akhuwat
Frequency Percent Valid Percent
Cumulative
Percent
Valid
0 1 .3 .3 .3
Nothing 44 14.8 14.8 15.2
Film annually 19 6.4 6.4 21.5
Film and park annually 43 14.4 14.5 36.0
Film and park semi
annually 142 47.7 47.8 83.8
Hoteling,film,park
annually 19 6.4 6.4 90.2
Hoteling,film,park semi
annually 12 4.0 4.0 94.3
Hoteling,film,park
monthly 17 5.7 5.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows the lack of entertainment activities in the borrowers’ lives.
Because of poor economic position they were not able to enjoy their lives. There were 14%
borrowers who had nothing to enjoy. 47% were those who used to go to the parks semi annually,
and only 5% were those who visited restaurants, cinemas and parks monthly.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 69
Entertainment after Akhuwat
Frequency Percent Valid Percent Cumulative Percent
Valid
Nothing 43 14.4 14.5 14.8
Film annually 10 3.4 3.4 18.2
Film and park annually 15 5.0 5.1 23.2
Film and park semi annually 134 45.0 45.1 68.4
Hoteling, film, park annually 55 18.5 18.5 86.9
Hoteling, film, park semi annually 16 5.4 5.4 92.3
Hoteling, film, park monthly 23 7.7 7.7 100.0
Total 297 99.7 100.0
Total 298 100.0
The above mentioned table shows that after taking loan from Akhuwat people started to enjoy
their lives. They started visits parks and cinemas more than previous. The number of borrowers
visiting parks and cinemas doubled in size.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 70
NPar Tests
Wilcoxon Signed Ranks Test
Sr. No. Test Statistics Z
1 Girls attending school after Akhuwat –
Girls attending school before Akhuwat -7.222a
2 Head of family income after Akhuwat –
Head of family income before Akhuwat -14.262a
3 Total family income after Akhuwat –
Total family income before Akhuwat -13.617a
4 Bread earners after Akhuwat –
Bread earners before Akhuwat -14.629a
5 Spending per month household expense after Akuwat –
Spending per month household expense before Akhuwat -9.677a
6 Eating meat after Akhuwat –
Eating meat before Akhuwat -8.634a
7 Eating fruit after Akhuwat –
Eating fruit before Akhuwat -3.671a
8 Servants after Akhuwat –
Servants before Akhuwat -6.971a
9 Falling sick after Akhuwat –
Falling sick before Akhuwat -7.554a
10 Medical treatment after Akuwat –
Medical treatment before Akhuwat -6.957a
11 Visit of relatives after Akhuwat –
Visit of relatives before Akhuwat -8.003a
12 Behavior of relatives after Akhuwat –
Behavior of relatives before Akhuwat -14.517a
13 Relatives and friends lends you money after Akhuwat –
Relatives and friends lends you money before Akhuwat -9.286a
14 Lent money to your friends and relatives after Akhuwat –
Lent money to your friends and relatives before Akhuwat -5.103a
15 Family and friends invitation on functions after Akhuwat –
Family and friends invitation on functions before Akhuwat -6.647b
16 Family and friends involvement in solving issues and problems after Akhuwat -
Family and friends involvement in solving issues and problems before Akhuwat -5.812a
17 Involvement of women in your family decisions after Akhuwat –
Involvement of women in your family decisions before Akuwat -4.036a
18 Members of any community in any society after Akhuwat –
Members of any community in any society before Akhuwat -14.799a
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 71
19 Respect by children after Akhuwat –
Respect by children before Akuwat -1.897a
20 Daily travel after Akhuwat –
Daily travel before Akhuwat -11.444a
21 Personal vehicle after Akhuwat –
Personal vehicle before Akhuwat -8.187a
22 Own house after Akhuwat –
Own house before Akhuwat -1.535a
23 Physical condition of house after Akhuwat –
Physical condition of house before Akhuwat -4.269a
24 Entertainment after Akhuwat –
Entertainment before Akhuwat -4.193a
a. Based on negative ranks.
b. Based on positive ranks.
For the survey 300 questionnaires were launched among the randomly selected borrowers
who took loan from Akhuwat for last several years. It has been observed that the loan of
Akhuwat has benefited the lives of its beneficiaries. The questionnaire was closed ended and the
borrowers were given the option to respond out of the options that were given to them. Wilcoxon
Signed Ranked Test is used, which is a non-parametric test. This test is used to find the impact of
any variable, before and after induction of a stimulus i.e. microfinance through Akhuwat. In the
research survey almost 30 variables were selected and out of 30 variables 24 variables have
shown significant improvement. It has been observed that the loan of Akhuwat, which is interest
free micro-financing, has a very positive influence over the lives of its borrowers. The social and
economic life of the beneficiaries has improved a lot. Now they are respected by their friends
and relatives and even by their family. The living standard has improved, as they are now in a
position to use meat, fruit and other necessities of life as compared to the life that they were
living before associating with Akhuwat.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 72
Conclusion
Microcredit is one source of financing for the poor. In terms of cost, the effective annual
interest rate on microfinance loans ranges from 14-41%. Grameen model Microfinance
Institutions which charge at a flat rate of interest, are at the higher end of this range. The best
part of Akhuwat is that they charge no interest, thus becoming a true example of Islamic
financing, which is Qaraz-e-Hasna. The role of Akhuwat in developing the life of poor people is
very important and very impressive. The respondents of Akhuwat say that all were benefited
from the loan and none of them felt that loan is a curse.
The analysis of the data has shown a significant improvement in the life of the
beneficiaries. The conclusions on the basis of data analysis are as follows:
Borrowers’ lives have been improved and their living standards have also improved.
Girls’ started attending school and the percentage of girls who were not attending
schools went down.
Income level of the borrower’s increased and now they become able to fulfill their
needs.
Total family incomes have also increased and all the family members get work to
earn livelihood to fulfill their desires.
Borrowers started eating meat and fruit more frequently as compared to the time
when they were not attached with Akhuwat.
Borrowers are now able to afford the employees for their business, which enhances
employment opportunities.
Their health improved they stated passing life without tensions and worries.
IMPACT ASSESSMENT OF MICROFINANCE: A CASE STUDY OF AKHUWAT 73
They started getting better medical treatment and became capable of affording the do
doctor for their medical check-up.
After Associating with Akhuwat the borrowers life has improved and their living
standards, due to this, their relatives started visiting them.
Relatives and friends started lending money because they know that now they are
capable of returning the loan back.
In short there is no harm in saying that after attachment with Akhuwat the life of borrowers has
improved and they are enjoying life in a good manner as compared to the time when they were
not associated with Akhuwat.
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