Muhammad Javed: How HDF Loans Maximized Carpenter's Efficiency and Profits

By Naveed Aslam

It used to take Muhammad Javed two days of backbreaking work to produce a simple piece of furniture. He did not have the luxury of using power tools and had to do everything manually. But he was able to purchase an electric planer using a loan he got from the local development organization of his village. Now his productivity has doubled and the work is far less tiring.

In the near future, he plans to rent a cemented shop to minimize termite attacks and maximize his sales by attracting a large number of people.
It wasn't long ago that the Human Development Foundation (HDF) began its interventions in Muhammad's village by organising a group of motivated and committed people. The idea behind these self-help projects is to help villagers support themselves through the mobilization of local resources and funds.

HDF organizes a development organization (DO) in each village. This group operates in coordination with HDF. It is made up of 10 residents, including elders, and supervises and monitors the projects in its jurisdiction. The villagers in Muhammad's village created a base of capital for lending by pooling their savings. Muhammad Javed soon became an active part of this development process by joining the DO of his village.

HDF's short-term loans have enabled many people to turn their lives around and stop the cycle of "hand-to-mouth" living. The success of HDF's micro-credit program can be gauged by the fact that these people are not merely earning enough money for themselves but are also repaying the loan in monthly instalments.

To date, HDF has provided more than Rs. 1.6 million ($US 26,570) in loans to 365 people in 48 villages. Rs. 600,000 ($US 1,000) have been paid back.