Munich Personal RePEc Archive

Channeling Local Culture into Sustainable Microfinance Solutions by Akhuwat: From Borrowers to Donors

Bashir, Rabia and Bajwa, Sami and Mamoon, Dawood (2017): Channeling Local Culture into Sustainable Microfinance Solutions by Akhuwat: From Borrowers to Donors.

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Abstract

This study is carried out to analyze the factors that results in conversion of borrowers into donors. The findings assist the microfinance institutions in coming up with the most appropriate measures to apply in order to eliminate not only defaults but also gain some financial sustainability by improving its donor profile. The study establishes that religious education and organizational religious philosophy influence borrower’s prosocial behaviors. Through religious teaching Akhuwat inculcate sense of responsibility, feeling of gratitude and psychological attachment, along with spiritual satisfaction to motivate borrowers to become donors. Being faith inspired organization; Akhuwat culture and its brand image depict strong association with Islamic value. The study recommends that the MFIs in order to enjoy a cordial relationship need to align their business philosophy with the local culture.

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