Farz Livestock Mudarbaha Methodology (Halal Karobar Project)

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FARZ METHODOLOGY

The First Shariah Certified Islamic Micro-Finance Institute

of Pakistan

VISION

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“To bring social change through

poverty alleviation by improving

productivity and capacity of partners

and staff”

MISSION

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Empowering the poor through innovative products and

diverse business opportunities, by

integrating social performance

focused microfinance with collaborative community

health and education partnerships.

TARGET MARKET

Business & Environmental

education

Health

Financial Service

AN INTEGRATED APPROACH

First Islamic Microfinance in Pakistan 4

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PRODUCTMUDHARBHA

THROUGH

LIVESTOCK

TARGET MARKET

• Geographical– Rural Area

• Demographical– Male/Female/Family/ – Age Group

• 25 to 50 years

– Income level • Moderate poor


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 FOUNDATION’S 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 VEHICLESupport from partners

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• Capital• AdvocacyInvestor

• Capacity Building• Medical Assistance

Provincial Ministry of Livestock.

• Human Resource• Awareness Services• Research

University of veterinary & Animals Sciences LHR.

• Standards for Halal ,Health & environment• Purchasing Animals from FF

Lahore Meat Corporation

• Support in Health• Scarcity • And Emergency

Responsible Giving Pools

• Theft• Death Takaful of Animal H

ALAL

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OJE

CT

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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 with poor Family

50%/50% at reproduced Goats

Modality of partnership with Investor

Investor gain 50% of the net profit

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.

FEATURES OF THE PRODUCT

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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


Period 10 to 12 Month


34 % of Net Profit


33 % of Net Profit

Farz Share 33 % of Net Profit


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FEATURES

Product Name BHI-WALI -3

Objective Meat Production

Size 10 Male Goats for one Poor Family

Age of Animal 3 Month

Kind Taidy


Period 5 to 6 Month


34 % of Net Profit


33 % of Net Profit

Farz Share 33 % of Net Profit


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1. The Model addresses the issue of food security at large.2. It is sustainable since Stone Age3. 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

SALIENT FEATURES

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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 Foundation’s 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 management6. 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

Committee” (participatory rotating saving) to build their assets.

OTHER FEATURES

BRANCH STRUCTURE

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Social Center Manger (BM)

Social officer (Mudharbha)



Social Officer Bai-Salam

Social officer (Murabaha)

Office boy

Veterinary Doctor Farm

Manager/accountant

The social officer , farm manager along with the BM must be livestock experts


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CLUSTER STRUCTURE At Community Level

DELIVERY PROCESS


Step 1

• MOBILIZATION + TRAINING

Step 2

• COMMUNITY MEETING CONDUCTED BY SOCIAL OFFICER (SO)

Step 3

• TO FINALIZE THE CLUSTER MANAGER AND GROUP LEADERS

Step 4

• HOME SCREENING

Step 5

• BUSINESS SCREENING

Step 6

• FINAL FORMATION MEETING

Step 7

• AGREEMENT AND DELIVERY OF GOATS

MOBILIZATION

Identification of potential partners within above mention target market.

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TAGGING & VACCINATION

AGREEMENT AND DELIVERY OF ANIMALS

Transparency of Agreement

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DELIVERY OF ANIMALS


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PRODUCTION OF ONE FEMALE GOAT

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OUTPUT BREAKUPMarket Price

Male/Female Age (Month)

# of …Out of One

Fe-male Goat

# of…Out of 5 Fe-male Goats Per Goat

Price (Out of One

Fe-male Goat)

Price (Out of Five Fe-male 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

PROJECT HIGHLIGHTS


Heads Amount in PKR USD $ As per RateInvestment on animals (inclusive of primary expanses) 20,000,000 235,294

PKR.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

Farmer’s 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%

MONITORING & EVALUATION

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• Daily, weekly, monthly, quarterly and six monthly reports system.

• Field visits of bottom to top Management.• Monthly Visit with 100% partners.• Social Performance Management.

MONITORING & EVALUATION

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FOOD SECURITY

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HEALTH CARE


HEALTH CARE

• Organizing Eye care Camps• Health Awareness Program


FUTURE PROTECTION PROGRAM

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FUTURE PROTECTION PROGRAMEducational Support to Community children


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QUESTION ? PLEASE

Farz Livestock Mudarbaha Methodology (Halal Karobar Project)

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