Livestock Loans in Pakistan

Adapted Products series: Services that meet the need of the Poor
Our Poverty-focused Microfinance Community of Practice (PovCoP) will be exploring adapted products over the coming months in a series of posts, group discussions, and interviews. We’ll start with a few case studies and learn what made each project a success. Please help broaden our understanding by sharing your own experiences with the community as well. For more information on adapting microfinance products globally, take a look at CGAPs recently released Better Insights for Better Products.

Livestock Loans in Pakistan
Farz Foundation is a Shari’ah compliant NGO providing asset-based microfinance services in Pakistan. Farz developed a suite of livestock loans (Bhi-Wali) to serve varying needs in the country’s pastoral population, including food insecurity for rural people living in poverty. With loan terms ranging from 10 to 48 months, each of the three Bhi-Wali products disperses a certain number of goats to pre-screened clients. The Bhi-Wali products are based on a profit sharing model, where Farz sees 33-50% of the net profits from each client cycle (click here to view a presentation on this project).

To inform this project (the Halal Karobar Project), Farz conducted market research in their community. The research determined, among other things,  the demand for asset-based/non-interest-based loans, the need for capacity building services, and most effective ways of advancing poor clients from micro to small to medium sized enterprise (SME) loans (click here to read the full report on this model). Bhi-Wali clients receive capacity building to use the loans, veterinary services for the goats, insurance for the goats, a purchaser for the goat meat, and other services provided through a variety of partnerships. The Farz Halal Karobar Project methodology – interest-free islamic finance based on strong partnerships – has seen much success, including three replications of the model by AAS Foundation Bahawal Nagar Pakistan, NGO World, and Islamic Saving and credit Cooperative of Cameroon. Additionally, in late 2011 the World Congress of Muslim Philanthropists (WCMP) and Farz Foundation signed an MOU to build on this model in developing “Shari’ah-compliant, need-based and market-driven innovative products.” The Farz methodology is one successful example of a pro-poor Islamic finance model.

Is this model relevant in both Islamic finance and other contexts?
Is there a need for asset-based microfinance services in all rural areas?
How could the supportive partnerships seen in the Halal Karobar model be adapted to meet the needs of poor people in your community?

Leave your thoughts in the comments section below

Have suggestions for this Adapted Products series?  Send them to Leah Verghese at MeasureLearnChange[@]gmail.com

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One thought on “Livestock Loans in Pakistan

  1. J’ai un problème de langue, je suis francophone.

    Freddy NUMBI NGOIE DG ADEKOR/IMF Tél.: +243816047349 – +243994799527

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