HALAL KAROBAR

HALAL INVESTMENT OPPORTUNITY

THROUGH ISLAMIC MICROFINANCE
Farz Foundation
A LIVESTOCOK PROJECT KICKED-OFF
BY PARTNERING WITH RURAL POOR

A PKRS. 60,000 PAKAGE OF 7 GOATS

WITH TAKAFUL ( Islamic Insurance for theft
and death ) For a Period 5 to 39 Months can
change the lives of the poor along with a
handsome Halal profit for the investor

Zafar Nagar , Adah Shahbeera Abad, Chinyot

Road District Jhang, Punjab, Pakistan

Farz Foundation is The First Shariah Microfinance Institute of Vendor &Mrketing Partner
Pakistan registered under section 42 non profit company
ordinance 1984 with Security & Exchange Commission of
Pakistan. Lahore Is the headquarter of Farz Foundation,
Al-Muqit
while it is working with three braches in Lahore and Jhang.
Jhang is the most neglected area of Punjab by the NGOs
particularly the deep rural areas of Jhang are still untapped. Salman Khalid :
+923214550275
Farz Foundation started its in Jhang during flood relief activ-
skhalid76@gmail.com
ity period and provided more than Rs.15 Million worth sup-
port in kind to the flood affected people of Tehsil Atthara info@farzfoundation.com
Hazari District Jhang. Farz Foundation also distribute 240 Www.farzfoundation.org
embroidery kits to the female poor artisans of the area.

Highlights of the project

 Investor comes with at least one package for 5 months to

39 months (recommended ) on profit and loss sharing
basis

 Farz Foundation provides a package of goats to the poor

family on 50% out put profit basis at the end of the one
business cycle.

 The Farz Foundation and the investor get 25% each from
the remaining 50%

 Farz Foundation runs its operations and other social work

for the poor from the same 25%

 After the period of 39 months the profit rises as 600%

200% and 200% according to assumed calculation

 Farz Foundation assures the security of the investment,

proper monitoring, Takaful for the death and the theft of
the animal, transparent sale & purchase of the animals
and other business modalities through a proper legal
agreement
 Al– Muqit is the vendor for sale and purchase of the ani-
mals with money back guaranty or change of the animal in
case of any illness or damage.

LIVESTOCK THROUGH ISLAMIC MICROFINANCE IN

PAKISTAN
A BIG OPPORTUNITY

According to the observation, mostly, at Islamic Microfinance Sector level,

it is being practiced with the conventional structures. If there is any will to
do can feel for Islamic Microfinance, the lack of proper systems and
unavailability of skilled staff are the hurdles. In Pakistan a few Islamic
banks are studying Islamic Microfinance models to chalk out a proper one.
However none of them found the key solution yet. SBP’s Institutional
development fund is an attraction for the institutions, but the people sitting
in the committee are preferring only the institutions already have a visible
scale. According to the vision of the committee members the institutional
development fund is not for the organizations which are not already
developed with a handsome portfolio, while the Islamic Microfinance means
no commercial funding, no capacity building no MIS and no product
development support. In Pakistan a few development organizations like
Islamic Relief, and Muslim Aid are doing Islamic Microfinance by
maintaining their other projects. A charity Based Microfinance Institution
has a tremendous Qarz e Hasna, portfolio, but being a non commercial
organization for donors the experts are not ready to accept it as a
sustainable model, while the past proves it more sustainable than many
other Microfinance institutes, which demonstrated worst in spite of having
all the popular microfinance controls and risk mitigating systems and
procedures.

The success of any business depends upon the proper Products

fundamentally, while the conventional microfinance products showed only
3% impact according to the CGAP study. It is obvious that the products sold
through microfinance were not appropriate to alleviate poverty. The reason I
found behind the failure was an incapable human resource and the lack of
true visionary leadership.

According to the current poverty alleviation scenario, we would have to

appreciate CGAPs efforts for identifying Islamic Microfinance for not only
the Muslim poor but to gain noticeable positive impact at a larger market.

During a survey for spotting a Farz SME Village in District Jhang, which is
an untapped area of Punjab province, and one cannot finds any
perceptible engagement from NGOs, because of (perhaps) being a
sectarian violence affected area. However, Farz Foundation has started its
operations in two rural areas of the District Jhang. During research work,
Farz Foundation found the area very potent to launch their traditional
products of livestock after a pretty customization and aligning the products
products of livestock after a pretty customization and aligning the products
with a formal Islamic Microfinance mechanism (Farz Methodology). At the
second stage of the study, the survey and the focus group discussions
revealed that the products of goats and sheep are more feasible than
buffalos and cows at the first phase.

Study also shows that only the customization of the system is required with
a capable human resource having strong interpersonal relationship ability
with the traditional and cultural familiarity to build a strong social and
business relationship with the client. And a huge untapped ripe market is
awaiting because the 65% economy of Pakistan is based on agriculture
and out of it almost 52% economy is based on livestock.
According to a Gilani Research Foundation survey carried out by Gallup
Pakistan, meat is the most essential food item in people’s daily diet. In a
survey in October 2008, respondents were also asked to list what they
would like as the main component of their daily diet. Assuming that
financial constraints were removed and price was kept constant the results
revealed: 52% would prefer meat.
while the products are needed and marketable at the international level
undoubtedly. The markets of UAE and Europe can be quoted as the
potential meat markets for Pakistan.

Community is expert in nurturing and nourishing the livestock from

centuries to maintain their living. They know every sophisticated detail
about the animal and also very found of having them as their assets.
Livestock has been considered here as a social status also and one can
measure the economic level of a family or a person by assessing the
volume of the livestock he or she has. There is a very common practice
among the rural poor community to get the livestock from a well-off land
lord on 33% partnership or some time at 50% for a breed period or a period
of maturity of the animals for meat purpose. The livestock for meat
purposes has an extraordinary prospective on Eid e Qurban along with the
daily consumption of the meat in the country. According to economic survey
of Pakistan 2005 and 2005, 1.9000 metric tan meat being consumed only
in Pakistan. Mostly rural poor feed the live stock by getting them to the
jungles and green fields. Where the animals get the grass and various other
stuff to eat. They give animals also the special food called Wanda.

The poor stock the animals for their hard days and also to fulfill their
immediate needs like accidents, weddings or in case of a death in their
family. They usually sell the animal and accomplish the necessity.

Studies predict the livestock is not only an ongoing consumable item and a
very successful business but a social welfare work and a noble cause also
as a poverty alleviating tool. According to the financial analysis of the
business by Farz Foundation, it gives 500% profit to the investor during a
project of three to five years period and is 1000% profitable for the poor.
The economy of a country could be run and poverty could be eliminated
only by the livestock business if done properly. Any how the microfinance or
even banking with conventional structures believing in monthly or
fortnightly recoveries with interest or profit may not be able to do this kind
fortnightly recoveries with interest or profit may not be able to do this kind
of business. Primarily Farz Foundation aims to disseminate the information
and to invite the social investors to step in, particularly the people wants to
do the Halal investments. If Islamic microfinance organizations engage
themselves only in livestock business, they can show the tremendous
results. Secondly Farz Foundation offers partnership opportunity at all
investors, donors and philanthropists level to come and join hands with
Farz Foundation in this regard.

Profile:
FARZ FOUNDATION is a multi faceted social organization
with microfinance and social uplift as its focal enclave and core
business. The Foundation’s multi dimensional approach to
poverty alleviation is grounded in out of box and creative
solutions with embedded ground realities compatibility. It is the
first Islamic microfinance organization of Pakistan (Shairah
certified). The Foundation is an Islamic Microfinance asset-based
provider, which has recently registered itself under section 42 of
the Companies Ordinance 1984 Security and Exchange
Commission of Pakistan.

FARZ FOUNDATION - THE ORGANIZATION

To bring social change through poverty alleviation by

VISION:
improving productivity and capacity of clients and staff

Empowering the poor through innovative products and

MISSION:
diverse business opportunities, by integrating social
performance focused microfinance with collaborative community
health and education partnerships.

ORGANIZATIONAL OBJECTIVES
To become an economically viable and financially sustainable
model organization through social and economic
performance based microfinance institution, which
conforms to Shariah modes of finance and investment.

Adopted a dynamic organizational structural design with

embedded knowledge organization concept, which enable
and support the organizational objective of creating:
 and support the organizational objective of creating:

A stimulating and professional work environment to the

staff and their continual capacity building;

operational research based development of financial

products and services that are geared towards
bringing positive uplift in target communities;

dynamic organizational platform suited for creating

linkages with other local and international
microfinance institutions/microfinance banks/donor
organizations and pertinent organizations &
agencies in the arena.

To bring improvement in:

economic and social status of poor households’

through adoption of Islamic modes of finance;

human resources development effort, which could

provide fillip to the entrepreneurial capacity building
and green technology driven development in
Pakistan;

social mobilization campaigns for:

elimination of gender discrimination in rural and

urban areas;

heightened awareness on environmental issues

and environmental conversation.

Green technology encompassing solutions and

there adoption at the grass root level;

basic preventative health education.

 basic preventative health education.

ORGANIZATIONAL STRUCTURAL DESIGN

BOARD

At the apex of the Foundation’s structure is the Board of

Directors, which consists of professionals having a strong
background of microfinance and development sector. The
Board functions are in conformity with specified Board of
Directors functions by Security and Exchange Commission of
Pakistan.
The Board provides guidance to Foundation’s management
on institutional strategic directions and oversees
management’s efforts in achieving given overarching strategic
objectives.
The chairperson of the Board is also the Foundation’s Chief
Executive and interplays between Board and management
centers. This relationship between strategy and operational
platforms is proving successful in the evolutionary process of
the organization.
The Board oversees linkages with:
Local and international donors agencies, multilateral
organizations, government, institutional and individual
investors;

financial institutions; regulatory bodies and other

stakeholders, including clients, employees, and
shareholders;
In its governance role, the board is accountable to all the
stakeholders and continually assesses the impact and
objectivity of the linkages.

ADVISORY BOARD
The Foundation has an Advisory Board structure, which is
headed by its own Chairman and has members that represent
wide spectrum of society.

The Advisory Board in its capacity advises the Foundation on

its strategic planning and management perspectives, and
its strategic planning and management perspectives, and
modes of intervention in socioeconomic sectors of the
country; with the expressed focus of achieving the
organizational objectives in a phased and planned manner. It
also advises the Foundation on intervention strategies in