Social Impact Assessment of Microfinance Programmes - weman

Akhuwat is run by Dr. Amjad Saqib who is the Executive Director, as well as the
Chairman of the Board. The organizational structure of Akhuwat (see Appendix) mainly
consists of the Operations department, and matters pertaining to the Human Resources,
IT and other issues are handled by the Programme Manager. This system works for
Akhuwat as it is still a small organization with a 52 person team. Apart from the
Programme Manager, the Executive Director is supported by a Finance Manager and an
Internal Auditor. Two advisors, for Finance and Credit, work on a voluntary basis and
meet with the Branch Managers on a monthly basis or more frequently if an issue comes
up. Dr Saqib and all the Board members have also worked on an honorary basis since the
beginning, as they felt drawing their salary out of donations would be inappropriate and
that it undermined their cause. Subsequently, the top management has no financial
interest and work purely out of benevolence. There are many other volunteers working
for Akhuwat who help in retrieval of payments and other matters. According to Dr.
Saqib, Akhuwat is a blend of volunteerism and necessary compensation.
As loans are interest free, it is imperative for Akhuwat to keep the costs low. Apart from
the fact that the senior management gets no remuneration, the organizational setup has
been kept very simple. The organization does not own any vehicle and the staff are
expected to go about on local transport or their motor-cycles, for which they are
reimbursed. The offices are small and simple, with very little furniture and ‘farshi’ 2
seating arrangements.
The Head Office also acts as one of the branches and is responsible for managing
individual loans. The Programme Manager leads a team of two Area Managers, each
responsible for four branches. Each branch is run by a Branch Manager, who leads a team
of 4-6 Unit Managers, who are responsible for the field operations of Akhuwat. Some
branches have a steering committee, comprised of 5-7 prominent individuals living in
that area and two from Akhuwat, generally the Area and the Branch Managers. The job
of the committee is to oversee all the functions of the branch and also to mobilize funds
in their respective areas.
5.1.3 Lending Methodology
5.1.3.1 Group Loans
Akhuwat started lending with the group methodology in 2001 and introduced individual
loans in 2003. The current plan is to phase out group loans and concentrate on individual
lending. As of June 2006, Akhuwat has not formed any new groups and is waiting for the
end of the loan cycles of those formed earlier. The reason for phasing out group loans is
that the group leaders were found to manipulate their position and extort money from the
borrowers for group membership. Most group members were selected on the basis of
their popularity in the locality and not on their genuine need for credit. The LO was also
sidelined by the President of the group and told that they themselves would take
responsibility of recovery and that the LO did not have to worry about it. Another
2 Seating arrangement on the floor with cushions and low tables.
3