Islamic Traditional Values: Towards Women Empowerment and Housing Microfinance in Pakistan

Although the roles of women have evolved with the urbanizing world, conventional house designs have failed to accommodate the spatial needs of the con-temporary woman. The majority of houses in Pakistani cities are owned, designed, and constructed by the male head of the family. After surveying forty houses in Lahore, it was revealed that there are issues of hygiene and privacy for women, who are usually ignored in the process of building homes. This is the case despite the fact that they are the primary users, who spend most of their time at home, either as housewives and/or as entrepreneurs running a business from home. Presently, there are numerous NGOs in Pakistan working towards women entrepreneurship but there is a disconnect between entrepreneurship, Islamic traditional values and empowerment. This paper will try to build an assembly for women empowerment through the outcomes of entrepreneurship and their in-volvement in household decisions based on Islamic traditional values.


Housing -A Shelter, a Home
Housing is a major infrastructural element and an integral part of the community fabric. It has a profound impact on the social, economic, and physical character of a community. The International Labour Organization in 1976 introduced shelter along with clothing and food as a basic need. 1 Provision of appropriate housing is important for the economic and social wellbeing of society. It typically constitutes 15% to 20% of household expenditures. For many women, especially those who are self-employed, their house is their place of work. Apart from economic and physical benefits, housing also has significant social benefits comprising of sanitation facilities, access to local educational and health facilities, welfare and the impact of shelter. 2 About 900 million dwellers of urban areas continue to live in squalid building units called "slums." They have proliferated over the last 20 years. The Millennium Development Goals have recognized the urgency of addressing this issue, with the prime target being to significantly improve a minimum of 100 million slum dwellers' lives approximately by 2020. 3 "Achieving this will require new ways of addressing critical issues such as access to land for housing, secure tenure, provision of basic services and improvements in housing for the urban poor. It will also mean supporting the incremental processes by which low income households build, since this is how most dwellings are built or improved. Creative measures and new ways of financing these must be found." 4

Housing Shortage in Pakistan
Pakistan's poor people, like their counterparts in other developing countries, are exposed to housing shortages. The 1980 housing census shows that the housing units in Pakistan increased only by 2.1% with a 3% population increase. The International Bank for Reconstruction and Development (IBRD) shows that residential plot development rate and infrastructural facilities provision were inadequate to meet the increasing demand. Due to elevated inflation of building materials on the demand side, the ability of poor people to afford and find a method to construct a house has been significantly lowered. 5

Translating Urban Growth into Demand for Housing
In the South Asian country of Pakistan, the concentration of economic activities in the cosmopolitan cities including Karachi and Lahore has always attracted the people living in rural settings. 6 There has been rapid growth of urban areas in Pakistan since the 1980s at a rate of around 77 percent during 1981-93, which indicates a high level of "rural-urban transformation." This process of urbanization has created a multitude of problems; the shortfall in services including housing and infrastructure are among several challenges. As elaborated by Ghaus & Pasha (1990), the construction of new housing units has been limited due to the slow rate of residential plot development in Pakistani cities and deficient municipal infrastructure. On the other hand, an increased building material price has reduced housing affordability. However, poor people find their ways; residential densities have increased due to slums and squatter settlements.

Housing Microfinance
Microfinance is an economic innovation believed to spearheaded by the Grameen Bank in Bangladesh. It anticipates the provision of various financial services and products to low-income people. It is an informal platform through which small loans are given to those living in poverty to stimulate entrepreneurship. Lowincome people who are deficient in providing collateral do not have permanent employment and a certifiable credit record. As such, they cannot meet the minimum eligibility criteria to gain access to banking credit. Microfinance has filled this gap and enabled these very disadvantaged people to have the chance to have some sort of access to capital and thereby get involved in self-entrepreneurship. For many, "Microfinance is nothing short of a revolution or a paradigm shift." 7 The most appealing aspect is that the financial simulations of microfinance sprang out from experimentations in a developing country like Bangladesh rather than from "adaptations of standardized banking models" of developed countries. This movement is expanding gradually to deliver small-scale loans, insurance, saving accounts and other wider financial assistances in low-income communities. "They are indeed unlocking the productive potential of the poor by growing small businesses." 8 Armendariz and Morduch (2007) said that, "On average, microfinance institutions lend $120 per loan with a maturity period up to one year. Commercial banks would realize no profit because of high transaction costs in such a small Volume 4, Issue II

Journal of Islamic Thought and Civilization
Fall 2014 39 loan size with longer maturity periods. The lack of banks does not mean that poor individuals are unable to borrow. They do, but from informal sources such as moneylenders, neighbors, relatives, and local traders. Such lenders often have more information on the loan takers (and effective means of enforcing contracts) that banks lack. Their resources, however, are limited. Microfinance presents itself as the latest solution to the age-old challenge of finding a way to combine the banks' resources with the local information and cost advantages of neighbors and moneylenders. Like traditional banks however, microfinance institutions can bring in resources from outside the community; "Microfinance is not the first attempt to do this, but it is by far the most successful." 9 Microfinance resonates with the finances of poor people because it sprang out of their culture and was developed specially with their requirements and potencies in mind. "The urban poor generally lack regular and high incomes and do not have any security to offer for collateral." 10 Conventional banks and financial organizations avoid these people because they lack credit worthiness. 11 "The poor people have consistently relied on informal sources, such as savings, informal loans from friends and family, remittances from family members working abroad and the sale of what so ever asset they have like jewellery or dowry." 12 However, after the development of the microfinance industry, many poor people are switching to it as it works with their 'informal' ways of living. Besides assisting emergency situations and income-generating activities, 13 microfinance for house building has also gained noticeable popularity in many countries.
There are few arguments that support the expansion of current microfinance programs into housing. Microfinance supports the household economy of micro entrepreneurs. Though the loans are apparently for business, people often employ these on on-going household wants, especially housing improvements or on emergencies. So indirectly, the enterprise loan was the extended credit for housing. Many loan programs learnt that almost 20 percent of the loan goes into housing. "A few -such as FIE in Bolivia -have explicitly recognized this reality and already started lending for housing, often by simply using the same instrument as that for microenterprise credit." 14 ACCION, an international microfinance agency suggests that many low-income families build their houses one step at a time in a process known as progressive build. They add water and sanitation facilities to a basic house, improve roofing and gradually add new rooms. ACCION uses this progressive build concept in the design of housing microfinance products. Loan amounts average $1,000-$1,500 with average loan terms of 18-24 months, slightly larger and longer term than typical microenterprise business loans, but far smaller and shorter term than traditional mortgages. Lenders do not require a title to guarantee the loan and are willing to accept less formal types of collateral, making the financing more accessible to low-income borrowers. Borrowers complete the construction of their homes through a series of loans. With this kind of financing, young families can begin improving their housing sooner because they don't have to wait until they can afford a whole-house mortgage, and they pay less in total interest costs." 15

Housing Shortage and Women
In Pakistan, it is very difficult for a Muslim woman practicing purdah 16 in an unplanned house with no consideration for privacy; it is very difficult for her to be in purdah throughout the day. Also, the kitchens are visible from public areas, where the home-making woman spends most of her time. There are also issues of hygiene and privacy. Sometimes, kitchens are not properly ventilated, usually adjoined by bathrooms. There are usually no separate private spaces for women. The houses are not even designed for women who run businesses, as there are no purpose-built workspaces in a house.

Microfinance and Women Under Islamic Finance
Contrary to modern financing procedures, the concept of Islamic financing prohibits interest. 17 As more than 95% of the population of Pakistan is Muslim, 18 Islamic financing is growing rapidly to the point where this philosophy accounts for 3.8% of the total deposits in the banking sector of Pakistan. Microfinance strategies adopted by Pakistani banks are a somewhat recent development. After the promulgation of an ordinance in 2001, six microfinance banks and many NGOs boosted microfinance practices. Microfinance reached three million customers in 2010.
Islamic teachings encourage Muslims to give donations in the form of zakat, ushar, and sadqa to the poor. Zakat is obligatory for every rich Muslim to give to the poor. It is 2.5 percent of the total wealth. 19 In Islamic microfinance, wealthy Muslims sometimes contribute funds through donations to give to the poor for micro-loans and this is considered an act of worship. 20 Among dozens of Pakistani NGOs and banks, it has been noticed that the NGO Akhuwat practices Islamic strategies for disbursing loans; firstly the loan amount is interest free. Secondly, it markets and disburses the loan in mosques, which are considered sacred religious places of worship. Each NGO branch is located within or just outside the mosque's premises so introduction to the program is also given when people congregate there after prayers. Hence, people assume that the NGO is sincere and is not lying in a holy place. 21 The standing of Muslim women varies in different parts of the world according to interpretation of Islamic law and religion. The doctrine of Islam that came from the revelations to Prophet Muhammad (SAW) about 610 C.E. was sympathetic towards women's rights. The role of women in Muslim societies has been driven by various economic, social and financial factors including increases in urbanization and technological advancement. In most Islamic and developing countries like Pakistan, people cannot afford to confine women to do only household work; additional work is required to support the family. 22

Microfinance and Women in Pakistan
Women empowerment through microfinance is one of the important issues in developing countries. Women are a central part of any society but their participation is very low in economic activities. "Microfinance plays a significant role in improving women decision making through participation in economic activi-ties." 23 The majority of microfinance programs tend to explicitly empower women. However, the means vary, some programs highlight women as being among the poorest and underprivileged populations. Other programs argue that investment in women's human potential enables them to consider options in economic development and growth. 24 According to Barr (2005), microloan programs have increased a lot within the past years and almost twenty-seven million people, mostly women, have borrowed from the loans. 25 Over the past few years, policy makers and microfinance institutions have gravitated towards women for their programs to deliver wider social benefits. Evidence from literature shows that the wellbeing of families, particularly that of children is affected positively by an increase in women's resources. 26 Finally, prevalent microfinance institutions prefer women as members because of their reputation for being trustworthy borrowers, thereby backing their financial sustainability. 27 Indeed, there exists a large bulk of confirmation which proves that women are more likely to spend and benefit the entire household than a male counterpart. 28 Increasing resources in female hands has a larger impact on welfare of the family and at large on the community. 29 According to , increased credit access had enabled women to negotiate for better decision making power, thereby subsequently increasing empowerment. 30 "Microfinance services lead to women empowerment by influencing their decision making power at household level and thus their overall socioeconomic status." 31 Hashemi (1996) argued that with positive effect of microfinance, women got more empowerment to contribute to household income. 32 Cheston and Kuhn (2002) stated, "Microfinance programs have the potential to transform power relation and to enhance women empowerment. Although female access to financial resources has been substantially increased, loans given to women differ in sizes. It has been shown that just to provide the access to financial resources is not enough to empower women and improve their well-being. Microfinance does not address all the barriers to women empowerment but if they are properly designed, they are an important contribution towards women empowerment." 33 Home ownership and retrieving financial capabilities is principally difficult for women in Pakistan, who usually do not own land and other property to be used as collateral. According to Niethammer, Saeed, Mohamed, Charafi, a 2007 UNICEF Report discovered that Pakistani women owned less than three percent of the total housing plots surveyed, even though Islamic shariah law clearly gave entitlement to the women to inherit land and property. 34 According to Hussein and Plateau (2006), male borrowers have 3.5 times more access to financial services than female borrowers in Pakistan; the average size of loans allocated to the women was Rs. 8,050 while for male clients the average was considerably higher at Rs. 19,382. 35 Further to financial constraints, women in Pakistan face a mobility barrier, which includes traveling for business purposes, not only as a result of poor infrastructure but also due to the social and cultural norms that still discourage women from going outside and moving freely in the community. This limited mobility often restricts their choice of business, with the result that most women engage in businesses that do not require mobility and which also, typically, only require contact with other women, for instance, beauty salons. 36 The following table provides survey results attempting to explain barriers to borrowing by gender in Pakistan: As visible in the table, most women do not like to ask for a loan; the other big percentage had no collateral to offer while applying for a loan.

Evidence of Islamic Housing Microfinance Practiced by Pakistani Women
To gather local data about microfinance practices in Pakistan, women who engaged in incremental house construction with and without microfinance were interviewed. An experience of house construction of forty women has been explored.
In-depth interviews with looking and listening surveys were used as data collecting tools. First of all, an NGO disbursing both housing and business loans was contacted. It was asked to provide names of the women who had completed the construction of their houses with the help of housing microfinance and the women that had only borrowed the enterprise loan. Furthermore, in order to explore the difference in incremental housing of the houses performed without microfinance, the women residing in the same neighbourhood were approached and interviewed. As there are not many organizations offering both micro-loans for business and housing, the NGO-Akhuwat was referenced to capitalize on the experience of borrowing micro-loans. Questions related to women's experience with microfinance and incremental housing process were asked.
The key findings are elaborated below:

Need of Increment
Various factors support the process of incremental housing for women. In a direct question, the participants were asked about the need behind every increment

Figure1: Graph Showing Increase in Household Size with Corresponding Increase in Number of Stories in Sehrish's House
Increase in family size also sometimes changes the character of a room as shown in Figure 2 below:

Figure 2: Drawing Room Converted into Bedroom for Newly Wed
In some cases, the need to construct a new room arises when children grow up. Some women desire to increase the household income by renting newly constructed rooms or sometimes for business purposes. Figure 3 shows an embroidery shop which has been opened by constructing a room adjacent to the house.

Source for Observing Purdah
For a woman, apart from financial and economic functions, a house may also serve a specific cultural purpose. For example, the house of an extended Muslim family practicing purdah requires a separate space for female family members. Moreover, female members require adequate housing because they often combine roles of regeneration, income generation, and physical management of the house itself. 37 In one case, after the death of her husband, a widow succeeded in maintaining privacy with the help of housing microfinance and constructed a boundary wall around her house to maintain her privacy from the community.

Raising Children with Work
In many cases, women run business from their homes, like Sadia, who acquired a business loan of Rs. 10,000 to start making rose arq (nectar). She is able to make a fair contribution to her household along with raising her children. In another case, as shown in Figure 5 below, Nazia, mother of two, opened a shop in her house with a business micro-loan. Her father, a retired government servant, helps her maintain and sell things in the shop while she takes care of her children.

Interest Free Loan Amount
NGO Akhuwat which offers interest free loans, was appreciated by majority of the women. In a direct interview question, all participants were asked about their preference regarding borrowing from Akhuwat. Most recognized and valued that Akhuwat loans are interest free.

Group Savings
In Pakistan, there is a culture of group savings called kameti (extracted from the English word committee), where a small group of people, usually women, contribute a fixed amount of saving for a certain period of time and the accumulated money is given to a member whose name comes in a lucky draw. Consequently, every participant obtains her saving turn by turn. It is very common in Pakistani communities, and works with a social control mechanism of peer pressure rather than conventional collateral.
Most of the time, the households combine multiple sources of finance including pensions, loans from relatives, personal savings, micro-loans, kameti, etc. in order to adjust the amount for the need. The following figure is an example of Zainab's house, which underwent its fourth construction in 2006 with a housing micro-loan. Each construction has different sources and amounts of finance.

First Floor First Floor First Floor Second Floor Second Floor
Step 1 Step 2 Step 3 Step 4

Barriers for Women
The following section highlights the barriers faced by women while experiencing housing and/or microfinance:

Lack of Technical Knowledge
Lack of technical knowledge about incremental construction results in unhygienic conditions for women, wastage of money and construction material. In an incrementally developed house, the spaces are not planned according to their use but as the need arises as shown in Figure 7 and 8 below, the bathroom is constructed adjacent to the kitchen; also the bathroom entrance, drainage of kitchen, and food storage are all in the same place.

Lack of Housing Support from Government
There was general agreement among all participants that the Pakistani Government is not helping the poor, especially women to acquire housing. There are no specific laws that support women to acquire land, construct a house or to borrow micro-loan on laid-back conditions.

Conclusions and Recommendations
Pakistan has 48% female population. Point of consideration is that if all the women sit at home idle, it means half of the population remains idle. The requirement of the day and of the present age is that women should play their part and contribute towards development of the country. 38 Housing microfinance resonates with both Islamic traditions and the fluctuating incomes of poor women; it provides Pakistani women the tools necessary for prosperity, not only for themselves but also for their families and the communities they live in. It has been witnessed that houses planned and built according to their specific needs are more productive. Greater potential for achieving scale and sustainability can be realized if financial institutions and governments work together. 39 To achieve this end, the following are a few policy guidelines:

Provision of Technical Assistance
Before disbursing housing loans, other activities have to take place such as a survey of the house concerned, training in technical skills and organizing community groups. By hiring female architects, the family would have a better understanding of the needs of women, such as the importance of workshop and kitchen inside the house. The woman may then not feel suffocated in a place where she has to spend almost half the day; and most importantly, to maintain purda while not being completely disconnected from the outer world.
An example of a modular house is one that has been designed by keeping needs of a woman entrepreneur in mind and which can be extended with time as the family grows or as more finances become available. The design relates to the traditions of local people with capacity of 7 people. The house plan ( Figure 11) includes three bedrooms, two washrooms, a kitchen, a workshop and central social area. A screen separates the workshop area. The units had a two-storey plan with bathrooms and the kitchen placed on the same wall in order to optimize services installations.

Create Women-Specific Loan Products
The Pakistani Government should encourage microfinance institutions to adopt a targeted, articulated gender focus as part of the national strategy to address women's empowerment. By providing women-only credit windows, female staff, and trained personnel adept at serving the banks' female clientele, much can be done to foster a female micro-client base. 40

Creation of Community Organizations
Localized community organizations have the capacity to serve the scale of needs that exist within their area because each is tailor-made to suit the particular circumstances of their local context. Although relatively small, localized operations may be more effective than big centralized ones, allowing eventually for personal knowledge to replace legal requirements and paperwork. Women are especially attracted to community groups because they have more relationship with others in the family and in the community. Community organizations also create a venue for meeting regularly and for learning from others; community organizations can act as saving banks and can channel revolving funds gathered through community savings. This can reduce the overhead of any formal lending institution spent on management of loan disbursement and repayments.

Discussion
The more financially secure a woman is, the more role and importance she will have as she will be allowed to become more empowered in household and community affairs. The assets from the father have a dominant place in their empowerment, and therefore, in decision-making of women in the household. In the cultural setup of Pakistan, instead of giving the share from property or business, the women are given dowry at the time of their marriage. This financial support makes the women more autonomous. However, "Access to resources alone does not empower women but also, access to material (credit, property, and money), human and social resources (education, business) also matters. Microfinance affects women's ability or decision making and self-confidence which are closely linked with knowledge, women's status and gender relations in the household." 41 It was evident from the interviews that micro-loan whether taken for housing or business, makes up a noteworthy bridging resource that allows for the necessary financial support to poor women in order to construct their houses incrementally and establish their businesses inside.
Various studies indicated that increasing women's resources directs greater expenditure towards children and results in the improved education and health outcomes of the whole family. 42 It has also been witnessed that when a woman runs a business inside the house, the standard of living and conditions in that house are far better than the neighbouring houses, their children attend school, and the women look happier and active.
Evidence from this research and literature shows that the wellbeing of families, especially of children, is affected positively by an increase in women's resources. 43 In 2001, Moore and Cosco suggested that children are knowledgeable about the housing conditions they are living in and that fear of losing their home can be a cause of great anxiety. 44 The majority of microfinance institutions also prefer women as members, because of their reputation for being reliable borrowers, thereby contributing to financial viability. 45 However, as discovered in this study, houses constructed with housing microfinance make up a noteworthy bridging resource that allows poor women to construct their houses incrementally and establish indoor businesses such as beauty salons, a small grocery shop or a tailoring space. 46 In this way, whilst staying at home, women have some additional income and can raise their children simultaneously. The story of these few women told us that housing microfinance resonates with both Pakistani traditions and the fluctuating incomes of poor women.