The Islamic Development Bank (ISDB), a Saudi Arabia-based multilateral development financial institution, recently announced that it will disburse a loan of PKR 14.6 billion (USD 146 million) with a 0.5 percent interest rate per year to the Punjab provincial government of Pakistan for a microfinance facility that will provide interest-free loans to small enterprises in the province, which is home to approximately 90 million people. The Punjab government plans to provide an additional grant of PKR 5 billion (USD 49.9 million) to support the facility. The project reportedly is modeled after the Akhuwat Scheme, a microfinance facility developed by Akhuwat, a Pakistan-based microfinance institution (MFI) that started in 2001 and provides interest-free microloans of up to PKR 50,000 (USD 500). The new microfinance program will offer loans of the same size, and like the Akhuwat Scheme, this new facility will not accept deposits. 
In the year 2012, ISDB had total assets of USD 15.9 billion, return on assets of 1.12 percent, return on equity of 1.67 percent and operations in 56 member countries. As of July 2013, Akhuwat reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 15.1 million, approximately 140,000 active borrowers and operations in 162 branches across Pakistan.
By Michael Averell, Research Associate
About Islamic Development Bank (ISDB)
The Islamic Development Bank (ISDB) is a Saudi Arabia-based development financial institution that formally began operations on October 20, 1975. The bank aims to foster the economic development and social progress of its 56 member countries as well as Muslim communities in non-member countries, in accordance with the principles of Islamic Law. As of 2012, ISDB has total assets of USD 15.9 billion, return on assets of 1.12 percent, return on equity of 1.67 percent and operations in 56 member countries.
Akhuwat, a microfinance institution (MFI) based in Pakistan, was established in 2001. As of July 2013, Akhuwat reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 15.1 million, approximately 140,000 active borrowers and operations in 162 branches across Pakistan. This MFI does not accept deposits.
Sources and Additional Resources
 The Express Tribune: “Self employment: Punjab set to launch new microfinance scheme,” http://tribune.com.pk/story/562007/self-employment-punjab-set-to-launch-new-microfinance-scheme/
MicroCapital story, April 18, 2012, “MICROCAPITAL BRIEF: Islamic Development Bank, UN’s AGFUND, Sudanese Government Fund Provide Capital of $5m to Microfinance Institution Al-Ebda’a,” http://www.microcapital.org/microcapital-brief-islamic-development-bank-uns-agfund-sudanese-government-fund-provide-capital-of-5m-to-microfinance-institution-al-ebdaa/
MicroCapital story, April 4, 2012, “MICROCAPITAL BRIEF: Islamic Development Bank (ISDB) Approves $10m Participation in Irada Microfinance Institution of Sudan,” http://www.microcapital.org/microcapital-brief-islamic-development-bank-isdb-approves-10m-participation-in-irada-microfinance-institution-of-sudan/
MicroCapital story, May 26, 2012, “MICROCAPITAL BRIEF: Microfinance Institution Akhuwat, Government of Punjab Provide Interest-free Loans of $11m to Unemployed in Pakistan,” http://www.microcapital.org/microcapital-brief-microfinance-institution-akhuwat-government-of-punjab-provide-interest-free-loans-of-11m-in-interest-free-loans-to-unemployed-in-pakistan/
MicroCapital story, October 9, 2012, “MICROCAPITAL EVENT: AlHuda Center, Akhuwat Organize Global Islamic Microfinance Forum, Dubai, December 8-10, 2012,” http://www.microcapital.org/microfinance-event-alhuda-center-akhuwat-organize-global-islamic-microfinance-forum-dubai-december-8-10-2012/
MicroCapital Universe Profile: Islamic Development Bank (ISDB) http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Islamic+Development+Bank
MicroCapital Universe Profile: Akhuwat http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Akhuwat
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