BLANTYRE — An Islamic charity has declared jihad on poverty in the southern African nation of Malawi, disbursing interest-free loans to small-scale business people, Muslims and non-Muslims alike.

"Irrespective of being a religious NGO with special interests in Islamic affairs, we thought of disbursing the loans to all and sundry irrespective of faith inclinations," Adil Hassan, the micro-finance manager at the Munazzamat Al-Dawa Al-Islamia (MDI), told IslamOnline.net.

He described the move as being part of the Muslim charity's efforts to assist the government in alleviating poverty.

"This is the only sure way of ending poverty in the country."

Hassan said they believe giving handouts would not mitigate poverty as people would develop a culture of receiving and not working to get their daily basic needs.

"We want people to become productive and self-reliant. Those not in the formal sector should be able to beat unemployment by creating employment using our loan facility."

In compliance with Shari`ah, the Muslim charity does not add interest to the money borrowed.

Islam, the second largest religion in Malawi after Christianity, prohibits usury and interest.

Government records suggest that Muslims make up 12 percent of the country’s total population of 12 million, but the Muslim umbrella organization puts the percentage at 36.

The Munazzamat Al-Dawa Al-Islamia also operates in Tanzania, Mozambique, South Africa, Comoro Islands and Madagascar.

It commenced its operations in Malawi back in 1996, providing educational, health and financial services for both Muslims and non-Muslims.

No Collateral

The requirement for collateral to get the Islamic loans has also been minimized, if not ignored.

"We realize that most of the people in our target audience are living in abject poverty," Sheikh Abdul Rahman Abdallah Ali, MDI regional director for the southeast African region, told IOL in Blantyre.

"Therefore, it would be unfair to deny the poor a chance to walk out of poverty on the basis of their poverty."

However, the charity screens and scrutinizes the applicants to ensure that they should not evade payment.

"We are not blind to the fact that others may have ill-intent. To check on such unscrupulous behavior, we have tightened the verification process," said Sheikh Ali.

He added that the interest-free loan is being operated with funding from foreign and domestic donors.

"It is a revolving fund."

Sheikh Ali said that although there has been overwhelming punctuality in repaying the loans, a general lack of entrepreneurial skills was affecting the operations of the businesses.

"We have since intensified efforts to design a tailor-made course for the applicants to ensure that they have the requisite business knowledge."

Thank-you

Sheikh Ali said the Muslim charity is proud of tales of rugs-to-riches being told by its loan beneficiaries.

"People who had absolutely no source of capital are now proud owners of internet cafes, mini-buses and many other types of businesses," he noted.

"In the long run, these people will help reduce poverty and unemployment by employing others."

Frank Vyazhi, a Presbyterian, was all smiles when interviewed in Mangochi, the predominantly Muslim district along the Lake Malawi.

"I have made tremendous improvements in my poultry business since I secured the MDI loan," he told IOL.

"In fact I didn’t imagine my application could be approved because I’m a Christian," quipped Vyazhi, a secondary school teacher.

Another beneficiary, Loyce Zin’tambira, feels the same.

"I was very humbled by the way the officials treated me," she said.

"There was no mention of religious affiliation whatsoever despite their knowledge I was a non-Muslim."

She stressed that the fact that no interest is charged on the borrowed money was a solace for her struggling business.

"Times are hard, but I can foresee a brighter future," said the non-Muslim woman.

"Having no interest charged on the borrowed money, and making repayments on flexible terms makes it sensible for my struggling business."