Problem / Project Background
In a study entitled "Social Security and Social Networks among the Urban Poor in Pakistan" widows were perceived to be the poorest members of the community, particularly those without family support. A sudden loss of livelihood brings tremendous hardship and suffering for the orphan and his/her mother.

Due to this financial crisis, the family is forced to withdraw children from education and children are forced into the labour market at an early age resulting in phenomenon such as child labour and street children. This problem is not helped by the fact that remarriage is not encouraged due to cultural pressures.

This project was initially aimed at providing widows with income generating activities to support their families. However, after making an assessment of the initial aims and objectives of the project, it was felt that the scope of the project should be expanded to cover vulnerable families and individuals who have dire needs and can create viable income generating projects.

These families are often faced with many constraints when trying to find suitable means of earning incomes to support themselves. Often they have neither the skills nor the capital to finance any small-scale activities, which might bring them some security.

It is envisaged that this project will be able to provide them with the means to set up small-scale income generating enterprises or improve existing activities through the provision of credit. This will enable the family to reduce its vulnerability and dependence on charitable contributions.

The credit is given as a loan, based on the Islamic principle of lending money, which has to be paid back over a period of time through the income generated by the income generating activities

Project Objectives

• To improve the living standard of low income families

• Increase income level through establishment of small-scale enterprise initiatives or improvements in existing activities

• Encourage a cultivation of saving habits within the communities

• Build empowerment for orphans and windows by enhancing their skills
  

Project Activities
Poor people are often faced with various constraints when setting up a small enterprise. Most common of these are the lack of skills and/or capital. This project aims to help remove these constrains.

The project will consist of two components. The first component and often a neglected part of such projects is to provide Enterprise Development Services (EDS).

This could be either to improve their existing income generation endeavors or to help them start new initiatives.

An organisation, which specialises in providing EDS called Pak Swiss Small Scale Enterprise Promotion Programme (SSEP) (Supported by Swiss Agency for Development and Co-operation) will cater for this.

The second component will be to provide micro credit to these individuals so that they are able to improve or start their income generating activities. The credit will be given using Islamic financing tools.

The close proximity of the project area to IRP office will be an added advantage in the project management and cost effectiveness of the project since credit program require hands on approach.

The project will consist of the following activities:

• Identify potential beneficiaries

• Establish groups

• Train members in credit and savings scheme

• Assess credit and EDS needs

• Provide credit and EDS

• Monitor groups

• Ensure repayment

• Evaluate performance

After potential beneficiaries have been identified through participatory approach they will be organised into groups within which they will be given credit. However, not all members of the group will be given credit. One member of the group will receive the credit and the other members will be used as security for the loan and as a source of encouragement to ensure that the money is returned on time.

This way after the credit has been paid back, other members of the group will be able to benefit from the credit. This type of peer pressure has proved to be extremely effective in keeping default to a minimum.

Islamic financing tool Murabaha will be used for the provision of credit. This works in that the beneficiaries identify their needs from within the group and a loan is given to that person to purchase / finance their requirements.

This loan is given for the cost of the required goods/supplies plus a percentage added to cover administration expenditure (Profit). The beneficiary then has to repay the payment spread over a period of one year.

Beneficiaries
75 families over the duration of the project

Other Activities in Country

• Karan Water Project (KWP)

• Kashmir Community Water Project (KCWP)

• Bagh Water Project (BWP)

• Neelum Valley Sustainable Livelihoods Project (NVSLP)

• Neelum Valley Disaster Preparedness Project (NVDPP)

• Small Scale Enterprise for Women (SEW)

• Neelum Valley Health Programme (NVHP)

• Baluchistan Water Rehabilitation Development Project (BWRDP)

• Prevention Of Blindness (POB)