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Farz Livestock Mudarbaha Methodology (Halal Karobar Project)

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The document describes an integrated Islamic microfinance model in Pakistan called Farz Methdology. [1] It has a vision of social change through poverty alleviation by improving productivity and capacity. [2] The mission is to empower the poor through innovative financial and business opportunities while also providing health and education partnerships. [3] The model provides livestock financing through a Mudarabah partnership structure between investors, Farz Foundation, and poor farmers.

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The First Shariah Certified Islamic Micro-Finance Institute of Pakistan FARZ METHODOLOGY 1
VISION To bring social change through poverty alleviation by improving productivity and capacity of partners and staff 2
MISSION Empowering the poor through innovative products and diverse business opportunities, by integrating social performance focused microfinance with collaborative community health and education partnerships. 3
AN INTEGRATED APPROACH Financial Service Health Business & Environmental education TARGET MARKET First Islamic Microfinance in Pakistan 4
PRODUCT MUDHARBHA THROUGH LIVESTOCK 5
TARGET MARKET Geographical Rural Area Demographical Male/Female/Family/ Age Group 25 to 50 years Income level Moderate poor First Islamic Microfinance in Pakistan 6
HALAL KAROBAR (BUSINESS) Halal Investment in Livestock Business Through Islamic Microfinance
BHAI WALI (MUDARBAH/PARTNERSHIP) Bhaiwali means brotherly Partnership Bhai Wali is a traditional way of partnership In livestock it calls Adhiyara, means 50/50
WHO ARE THE PARTNERS Investor (Can be an individual or an organization) Farz Foundation as service provider 1 Poor Farmer as a service provider 2
MODE OF BUSINESS Mudarbah, as profit and loss share accordingly.
ROLE OF THE INVESTOR Investment at mutually agreed level On mutually agreed profit sharing ratio. However according to this product of FF, The poor farmer gets 50% and it would be considered as expanse
ROLE OF FARMER Nourishing Grazing/feeding Breeding Provide shelter for animals Care & Growth
FARZ FOUNDATIONS ROLE Inviting for investment Identification of potential farmers Purchasing & delivery of animals Monitoring Health care Supervision Capacity building of the Farmer Record keeping & Reporting Selling Profit distribution etc.
RISK MITIGATION VEHICLE Support from partners HALAL KAROBAR PROJECT Capital Investor Advocacy Provincial Ministry Capacity Building Medical Assistance of Livestock. University of veterinary Human Resource Awareness Services & Animals Sciences LHR. Research Lahore Meat Standards for Halal ,Health & environment Purchasing Animals from FF Corporation Support in Health Responsible Giving Scarcity Pools And Emergency Theft Takaful of Animal Death 14
FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI --1 Objective Breeding Size Unit of 6 Goats for one poor Family ( 5 Female Goats + 1 Male Goat) Age of Animal 10 to 12 month Kind Desi /Beetal/Barbani/Kamori/Rajanpuri Size of Investment PKR: 100,000/ Unit Period 42 to 48 month Modality of partnership 50%/50% at reproduced Goats with poor Family Modality of partnership Investor gain 50% of the net profit with Investor Farz Gain 50% of net profit The parent Animals remain as owned by Investor and the Foundation can hold them back after 42-48 months and can transfer the animals to another poor family for the same purpose on behalf of the Investor. 15
FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI -2 Objective Qurbani Animals Production Size 5 Male Goats for one Poor Family Age of Animal 6 Month Kind Beetal, Rajan Puri, Desi Size of Investment PKR: 100,000/ Unit Period 10 to 12 Month Modality of partnership 34 % of Net Profit with poor Family Modality of partnership 33 % of Net Profit with Investor Farz Share 33 % of Net Profit 16
FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI -3 Objective Meat Production Size 10 Male Goats for one Poor Family Age of Animal 3 Month Kind Taidy Size of Investment PKR: 100,000/ Unit Period 5 to 6 Month Modality of partnership 34 % of Net Profit with poor Family Modality of partnership 33 % of Net Profit with Investor Farz Share 33 % of Net Profit 17
SALIENT FEATURES 1. The Model addresses the issue of food security at large. 2. It is sustainable since Stone Age 3. The poor family sustains, The village sustains, the economy of the country sustains. 4. SADQA-E-JAARIAH( A social performance opportunity also for social investors as well ) 5.Also Profitable for Commercial Investors 6.Interest free 7. Saves the female goats 18
OTHER FEATURES 1. 80% time must be invested in the Selection of the potential partners. 2. Transparent Mudarbaha (Partnership) Agreement as an Islamic business model for investors. 3. Farz Foundations Skilled Staff for the Operation, Monitoring, supervising and evaluation. 4. Insurance of Each Animal (Theft and Death) 5. Tagging for, Identification of animals and Breed management 6. Full Time availability of an experienced Veterinary Doctor for care and growth of the animals. 7. Capacity Building of the partners for the enhancement of their nurturing ability. 8. Monthly visit of the Social Officer (Field Officer) under the supervision of Branch Manager and Monitoring Department. 9. Farz Foundation provides health care facility to the partners and their family . 10. Farz Foundation also provides the other services to the partners like Farz 19 Committee (participatory rotating saving) to build their assets.
BRANCH STRUCTURE Social Center Manger (BM) Farm Veterinary Doctor Manager/accounta nt Social officer Social officer Social officer Social Officer Bai- Social officer (Mudharbha) (Mudharbha) (Mudharbha) Salam (Murabaha) Office boy The social officer , farm manager along with the BM must be livestock experts 20
CLUSTER STRUCTURE At Community Level GL GL GL M M M M M M M M M M M M GL GL M M M M CM M M M M First Islamic Microfinance in Pakistan 21
DELIVERY PROCESS Step MOBILIZATION + TRAINING 1 Step COMMUNITY MEETING CONDUCTED BY SOCIAL OFFICER (SO) 2 Step TO FINALIZE THE CLUSTER MANAGER AND GROUP LEADERS 3 Step HOME SCREENING 4 Step BUSINESS SCREENING 5 Step FINAL FORMATION MEETING 6 Step AGREEMENT AND DELIVERY OF GOATS 7 First Islamic Microfinance in Pakistan 22
MOBILIZATION Identification of potential partners within above mention target market. 23
28
29
30
TAGGING & VACCINATION 31
AGREEMENT AND DELIVERY OF ANIMALS Transparency of Agreement 32
33
DELIVERY OF ANIMALS First Islamic Microfinance in Pakistan 34
35
PRODUCTION OF ONE FEMALE GOAT 36
OUTPUT BREAKUP Market Price Price (Out of Price (Out # of Out of Male/ # ofOut of 5 One of Five Age (Month) One Per Goat Female Fe-male Goats Fe-male Fe-male Fe-male Goat Goat) Goat) Male 14 8 40 12,200 97,600 488,000 Male 9 3 15 8,100 24,300 121,500 Male 6 3 15 5,400 16,200 81,000 Male 3 1 5 2,700 2,700 13,500 Male 1 1 5 900 900 4,500 Female 36 1 5 17,100 17,100 85,500 Female 30 1 5 16,200 16,200 81,000 Female 28 1 5 15,900 15,900 79,500 Female 25 2 10 15,450 30,900 154,500 Female 23 1 5 15,050 15,050 75,250 Female 20 1 5 14,300 14,300 71,500 Female 17 1 5 13,300 13,300 66,500 Female 9 3 15 8,100 24,300 121,500 Female 6 3 15 5,400 16,200 81,000 Female 3 1 5 2,700 2,700 13,500 Female 1 1 5 900 900 4,500 Sub-Total 32 160 153,700 308,550 1,542,750 Less. Mortality rate@ 30% 46,110 92,565 462,825 Grand Total 107,590 215,985 1,079,925 37
PROJECT HIGHLIGHTS Heads Amount in PKR USD $ As per Rate Investment on animals (inclusive of PKR. primary expanses) 20,000,000 235,294 85 Operational expanse (Adjustable) 21,455,821 252,421 Total Funds Required During the Project 41,455,821 464,186 Total Sale of Male Goats 97,600,000 1,148,235 Total Sale of Fe-Male Goats 211,340,000 2,486,353 Total Sale 308,940,000 3,634,588 Mortality 92,682,000 1,090,376 30% Total sale After Mortality 216,258,000 2,544,212 Farmers Share 108,129,000 1,272,106 50% Net Business Profit 108,129,000 1,272,106 Actual Expanse 67,834,043 798,048 Net Profit/Loss 40,294,957 474,058 50% Farz Share (out of Net Profit) 20,147,479 237,029 50% Investor Share (out of Net Profit) 20,147,479 237,029 50% First Islamic Microfinance in Pakistan 38
MONITORING & EVALUATION 39
40
MONITORING & EVALUATION Daily, weekly, monthly, quarterly and six monthly reports system. Field visits of bottom to top Management. Monthly Visit with 100% partners. Social Performance Management. 41
FOOD SECURITY 42
43
HEALTH CARE First Islamic Microfinance in Pakistan 44
HEALTH CARE Organizing Eye care Camps Health Awareness Program First Islamic Microfinance in Pakistan 45
46
FUTURE PROTECTION PROGRAM 47
FUTURE PROTECTION PROGRAM Educational Support to Community children First Islamic Microfinance in Pakistan 48
QUESTION ? PLEASE 49

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Farz Livestock Mudarbaha Methodology (Halal Karobar Project)

  • 1. The First Shariah Certified Islamic Micro-Finance Institute of Pakistan FARZ METHODOLOGY 1
  • 2. VISION To bring social change through poverty alleviation by improving productivity and capacity of partners and staff 2
  • 3. MISSION Empowering the poor through innovative products and diverse business opportunities, by integrating social performance focused microfinance with collaborative community health and education partnerships. 3
  • 4. AN INTEGRATED APPROACH Financial Service Health Business & Environmental education TARGET MARKET First Islamic Microfinance in Pakistan 4
  • 5. PRODUCT MUDHARBHA THROUGH LIVESTOCK 5
  • 6. TARGET MARKET Geographical Rural Area Demographical Male/Female/Family/ Age Group 25 to 50 years Income level Moderate poor First Islamic Microfinance in Pakistan 6
  • 7. HALAL KAROBAR (BUSINESS) Halal Investment in Livestock Business Through Islamic Microfinance
  • 8. BHAI WALI (MUDARBAH/PARTNERSHIP) Bhaiwali means brotherly Partnership Bhai Wali is a traditional way of partnership In livestock it calls Adhiyara, means 50/50
  • 9. WHO ARE THE PARTNERS Investor (Can be an individual or an organization) Farz Foundation as service provider 1 Poor Farmer as a service provider 2
  • 10. MODE OF BUSINESS Mudarbah, as profit and loss share accordingly.
  • 11. ROLE OF THE INVESTOR Investment at mutually agreed level On mutually agreed profit sharing ratio. However according to this product of FF, The poor farmer gets 50% and it would be considered as expanse
  • 12. ROLE OF FARMER Nourishing Grazing/feeding Breeding Provide shelter for animals Care & Growth
  • 13. FARZ FOUNDATIONS ROLE Inviting for investment Identification of potential farmers Purchasing & delivery of animals Monitoring Health care Supervision Capacity building of the Farmer Record keeping & Reporting Selling Profit distribution etc.
  • 14. RISK MITIGATION VEHICLE Support from partners HALAL KAROBAR PROJECT Capital Investor Advocacy Provincial Ministry Capacity Building Medical Assistance of Livestock. University of veterinary Human Resource Awareness Services & Animals Sciences LHR. Research Lahore Meat Standards for Halal ,Health & environment Purchasing Animals from FF Corporation Support in Health Responsible Giving Scarcity Pools And Emergency Theft Takaful of Animal Death 14
  • 15. FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI --1 Objective Breeding Size Unit of 6 Goats for one poor Family ( 5 Female Goats + 1 Male Goat) Age of Animal 10 to 12 month Kind Desi /Beetal/Barbani/Kamori/Rajanpuri Size of Investment PKR: 100,000/ Unit Period 42 to 48 month Modality of partnership 50%/50% at reproduced Goats with poor Family Modality of partnership Investor gain 50% of the net profit with Investor Farz Gain 50% of net profit The parent Animals remain as owned by Investor and the Foundation can hold them back after 42-48 months and can transfer the animals to another poor family for the same purpose on behalf of the Investor. 15
  • 16. FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI -2 Objective Qurbani Animals Production Size 5 Male Goats for one Poor Family Age of Animal 6 Month Kind Beetal, Rajan Puri, Desi Size of Investment PKR: 100,000/ Unit Period 10 to 12 Month Modality of partnership 34 % of Net Profit with poor Family Modality of partnership 33 % of Net Profit with Investor Farz Share 33 % of Net Profit 16
  • 17. FEATURES OF THE PRODUCT FEATURES Product Name BHI-WALI -3 Objective Meat Production Size 10 Male Goats for one Poor Family Age of Animal 3 Month Kind Taidy Size of Investment PKR: 100,000/ Unit Period 5 to 6 Month Modality of partnership 34 % of Net Profit with poor Family Modality of partnership 33 % of Net Profit with Investor Farz Share 33 % of Net Profit 17
  • 18. SALIENT FEATURES 1. The Model addresses the issue of food security at large. 2. It is sustainable since Stone Age 3. The poor family sustains, The village sustains, the economy of the country sustains. 4. SADQA-E-JAARIAH( A social performance opportunity also for social investors as well ) 5.Also Profitable for Commercial Investors 6.Interest free 7. Saves the female goats 18
  • 19. OTHER FEATURES 1. 80% time must be invested in the Selection of the potential partners. 2. Transparent Mudarbaha (Partnership) Agreement as an Islamic business model for investors. 3. Farz Foundations Skilled Staff for the Operation, Monitoring, supervising and evaluation. 4. Insurance of Each Animal (Theft and Death) 5. Tagging for, Identification of animals and Breed management 6. Full Time availability of an experienced Veterinary Doctor for care and growth of the animals. 7. Capacity Building of the partners for the enhancement of their nurturing ability. 8. Monthly visit of the Social Officer (Field Officer) under the supervision of Branch Manager and Monitoring Department. 9. Farz Foundation provides health care facility to the partners and their family . 10. Farz Foundation also provides the other services to the partners like Farz 19 Committee (participatory rotating saving) to build their assets.
  • 20. BRANCH STRUCTURE Social Center Manger (BM) Farm Veterinary Doctor Manager/accounta nt Social officer Social officer Social officer Social Officer Bai- Social officer (Mudharbha) (Mudharbha) (Mudharbha) Salam (Murabaha) Office boy The social officer , farm manager along with the BM must be livestock experts 20
  • 21. CLUSTER STRUCTURE At Community Level GL GL GL M M M M M M M M M M M M GL GL M M M M CM M M M M First Islamic Microfinance in Pakistan 21
  • 22. DELIVERY PROCESS Step MOBILIZATION + TRAINING 1 Step COMMUNITY MEETING CONDUCTED BY SOCIAL OFFICER (SO) 2 Step TO FINALIZE THE CLUSTER MANAGER AND GROUP LEADERS 3 Step HOME SCREENING 4 Step BUSINESS SCREENING 5 Step FINAL FORMATION MEETING 6 Step AGREEMENT AND DELIVERY OF GOATS 7 First Islamic Microfinance in Pakistan 22
  • 23. MOBILIZATION Identification of potential partners within above mention target market. 23
  • 24. 28
  • 25. 29
  • 26. 30
  • 28. AGREEMENT AND DELIVERY OF ANIMALS Transparency of Agreement 32
  • 29. 33
  • 30. DELIVERY OF ANIMALS First Islamic Microfinance in Pakistan 34
  • 31. 35
  • 32. PRODUCTION OF ONE FEMALE GOAT 36
  • 33. OUTPUT BREAKUP Market Price Price (Out of Price (Out # of Out of Male/ # ofOut of 5 One of Five Age (Month) One Per Goat Female Fe-male Goats Fe-male Fe-male Fe-male Goat Goat) Goat) Male 14 8 40 12,200 97,600 488,000 Male 9 3 15 8,100 24,300 121,500 Male 6 3 15 5,400 16,200 81,000 Male 3 1 5 2,700 2,700 13,500 Male 1 1 5 900 900 4,500 Female 36 1 5 17,100 17,100 85,500 Female 30 1 5 16,200 16,200 81,000 Female 28 1 5 15,900 15,900 79,500 Female 25 2 10 15,450 30,900 154,500 Female 23 1 5 15,050 15,050 75,250 Female 20 1 5 14,300 14,300 71,500 Female 17 1 5 13,300 13,300 66,500 Female 9 3 15 8,100 24,300 121,500 Female 6 3 15 5,400 16,200 81,000 Female 3 1 5 2,700 2,700 13,500 Female 1 1 5 900 900 4,500 Sub-Total 32 160 153,700 308,550 1,542,750 Less. Mortality rate@ 30% 46,110 92,565 462,825 Grand Total 107,590 215,985 1,079,925 37
  • 34. PROJECT HIGHLIGHTS Heads Amount in PKR USD $ As per Rate Investment on animals (inclusive of PKR. primary expanses) 20,000,000 235,294 85 Operational expanse (Adjustable) 21,455,821 252,421 Total Funds Required During the Project 41,455,821 464,186 Total Sale of Male Goats 97,600,000 1,148,235 Total Sale of Fe-Male Goats 211,340,000 2,486,353 Total Sale 308,940,000 3,634,588 Mortality 92,682,000 1,090,376 30% Total sale After Mortality 216,258,000 2,544,212 Farmers Share 108,129,000 1,272,106 50% Net Business Profit 108,129,000 1,272,106 Actual Expanse 67,834,043 798,048 Net Profit/Loss 40,294,957 474,058 50% Farz Share (out of Net Profit) 20,147,479 237,029 50% Investor Share (out of Net Profit) 20,147,479 237,029 50% First Islamic Microfinance in Pakistan 38
  • 36. 40
  • 37. MONITORING & EVALUATION Daily, weekly, monthly, quarterly and six monthly reports system. Field visits of bottom to top Management. Monthly Visit with 100% partners. Social Performance Management. 41
  • 39. 43
  • 40. HEALTH CARE First Islamic Microfinance in Pakistan 44
  • 41. HEALTH CARE Organizing Eye care Camps Health Awareness Program First Islamic Microfinance in Pakistan 45
  • 42. 46
  • 43. FUTURE PROTECTION PROGRAM 47
  • 44. FUTURE PROTECTION PROGRAM Educational Support to Community children First Islamic Microfinance in Pakistan 48