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New Delhi 9th July: A meeting of Sahulat Microfinance Society was held on 9th July at Shoora Hall, Markaz, Jamaat-e-Islami Hind in which the states presidents of Jamaat, North India were especially invited. It was started at 10 am and continued till 7 pm evening. The meeting was inaugurated by Prof. K. A. Siddique Hassan, Vice President of Jamaat-e-Islami and President of Sahulat Microfinance. Arshad Ajmal gave the detailed information about Sahulat Microfinance. The meeting was concluded by Prof. K. A. Siddique Hassan sb. The main emphasis of this meeting was to establish an interest free microfinance cooperative. Arshad Ajmal sb said that the interest-free financial institutions can be run under Cooperative Acts in India. It does not need external funding.
Cooperative means involvement of ever increasing stake-holders leading to mass base for interest-free financing alternative.Cooperative is legal, democratic, transparent, educative and accountable alternative. It will be an option for removing socio-economic disparities and to achieve justice and equity for educationally and financially backward sections of the public at large. It will undertake and promote need based research and develop different products, special purpose vehicles, financial instruments and standard operating processes of Interest Free Micro Finance Institutions. The microfinance cooperative will have micro deposits in which there will be several account opening options like Amanat a/c, Sahyoga a/c, Daily Deposit a/c, Ear-marked a/c, Child a/c and Micro credits having options of demand loan, on fixed servicing charge basis, STBL, on profit-loss sharing basis, Cost-plus loan, on fixed service charge basis, Cost-plus loan, on Murabaha basis, business loan, only at main branch, growth fund, one or multiple units of Rs. 500/- can be purchased. The fund so raised is invested as pre decision of Growth Fund Committee, consisting of experts, professionals and members nominated by the Board of Directors.
The aims of this meeting was:
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To establish interest free microfinance institutions, to undertake need based research and develop products, special
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To facilitate, promote, and develop the establishment of Interest Free Microfinance Institutions including provision of corpus and revolving fund to associated associations.
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To undertake and promote need based research and develop different products, special purpose vehicles, financial instruments and standard operating processes of Interest Free Micro Finance Institutions.
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To establish training institutes and data banks for Interest Free Micro Finance, and to evolve and arrange internal check system and internal audit facilities, and coordination between related institutions;
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To liaise and do advocacy with Policy makers in order to develop a justifiable national policy on Interest Free Micro Finance; and
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To undertake all other lawful activities those are incidental to these objectives.
initial members have to be drawn with Jamaat support. -
Location of Main/Local Branch can be decided by Jamaat.
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Bye-laws to be framed and registered under Cooperative Acts.
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Supervisory and managerial staff to be trained for effective management of cooperative branches.
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Socio-economic survey of localities to be conducted to customise the deposit and credit products having Shariah compliance.
In the meeting the working model of Al-khair was given which was registered and functioning as interest-free cooperative since 2002. It will be an extension of interest-free institutions of Jamaat in legal framework and having more than 3000 members with branches in 4 cities/township in Bihar.
It has developed STANDARD OPERATING PROCEDURE (SOP) for managing various interest-free products of deposit, credit and investment. It has also developed an effective mechanism for regulating and supervising the functioning and financial transaction of branches on daily, monthly, quarterly and annual basis with standard MIS. An Application software has been developed to manage large number of accounts with minimum trained staff. Al-Khair an eighty years of interest-free cooperative experiment has proved the viability of interest-free microfinancing in India.
It has developed an effective mechanism for regulating and supervising the functioning and financial transaction of branches on daily, monthly, quarterly and annual basis with standard MIS.
Sahulat Microfinance will promote and facilitate 500 cooperative branches by the end of 2016 and mobilise seed money for new cooperatives and branches.
It will establish 4 Regional Offices and training & research unit.
It will provide framework for networking of cooperatives at the national level.
The Al-khair an interest free financial institutions elect Board of Directors & Chairperson by Cooperative members for a term of 5 years. The Board of Directors of Al-Khair acts acts as legislative body and as such, its members and office bearers cannot hold any position of profit.
The Managing Director of Al-Khair works on honorarium/ remuneration having supervisory control on the functioning of branches. It s branches are run by paid employees – normally Branch Manager, Accounts Assistant and Peon-cum-Record keeper.
The branches of Al-Khair are supervised and controlled by LAMCs for each branch, consisting of 5 to 11 eleven members with an elected President and Branch Manager as Member-Secretary.
LAMC meets weekly to dispose of membership applications and loan applications.
Every branch opens and closes as per announced office hours and sends closing balance report in prescribed format to the Headquarter.
Accounts of all the branches are internally audited on quarterly basis and annualy audited for statuary and placed in AGM.
Annual report is submitted without fail to the Central Registrar, Cooperative.
Expenses of branch is met from service charge, profit sharing income, cost-plus receipts and donations.
Progressively, Al-Khair is reducing the share of service charge and donation in meeting the expenses.
Specially designed software has been introduced in all branches to effectively manage financial transactions.
