Abstract
This case describes how Akhuwat - an Islamic microfinance
NGO, working in various parts of Pakistan on qard. al-h. asan basis,
significantly reduced high operating cost through its innovative and
Islamically charished process of benovelence and cooperation. In
conventional microfinance models, high operating cost is usually considered
as unavoidable cost and is ultimately transferred to the poor clients as direct
credit supply cost. Akhuwat first channelized qard. al-h. asan to the poor and
financially marginalized communities in Lahore region through technically
viable, cost efficient, socially responsible and religiously compatible
processes which distinguished Akhuwat model of Islamic microfinance.
The scheme is now being replicated in other regions and by other similar
organizations. This case explains how Akhuwat devised mechanism to
minimize operating cost to increase the chance of provision of loans to the
poor on sustainable basis while putting minimum financial burden on the
organization.
Zahoor Khan , Muhammad Siddique, Malik Muhammad. (2018) Minimizing Operating Cost of Islamic Microfinance Institutions: A Case of Akhuwat, Journal of Islamic Business and Management, Volume 8, Issue S.
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