Pakistani entrepreneur changing lives one step at a time

Zain Ashraf Mughal started Seed Out with the aim of eradicating poverty through micro-financing and crowdfunding

LAHORE: Every year, Forbes releases a list of individuals under the age of 30, who are trailblazers in their respective fields. Among the five people from Pakistan picked for the ‘Forbes 30 under 30 Asia Social Entrepreneurs 2019’ list is Seed Out CEO Zain Ashraf Mughal.

A resident of Gujranwala, 28-year-old Ashraf belongs to a family with a substantial business portfolio. Speaking to The Express Tribune, he says that he set up his nonprofit organisation (NGO) with the aim of eradicating poverty by keeping in mind concepts such as micro-financing and crowdfunding.

Ashraf says that when he was young, he used to see many people come to his home for alms during the month of Ramazan and other religious festivals. “The same people used to come to our house every year asking for alms and charity,” he says. “Seeing them year after year used to make me wonder why their circumstances have not changed over the years,” he adds.

As a result, when Ashraf grew up, he decided he wanted to make a difference in such peoples’ lives by enabling them to stand on their own two feet.

After studying different micro-financing models, he managed to formulate his own model using his expertise in IT. With a clear vision in mind, he formed Seed Out. According to Forbes’ website, Seed Out is Pakistan’s first crowdfunding platform that works to end poverty by establishing entrepreneurs with interest-free micro financing. Through the website, donors can choose to donate or lend to individuals listed on the website. The donations are directly transferred to the NGO’s account. When the donation target is reached, Seed Out purchases goods required for the entrepreneur and hands it over to them.

In five years, Ashraf has managed to help hundreds of families living below the poverty line. According to statistics on Seed Out’s website, the NGO has helped 600 entrepreneurs set up their own businesses, impacting 3,000 lives and enabling 1,800 children to resume their education through disbursing approximately Rs50 million.

Ashraf maintains that any citizen can make a profile on Seed Out’s website. After a profile is created, a seven-step process verifies the authenticity of the application to ensure transparency before it is uploaded.

After the profile is live on our website, anyone in the world can donate to the person who has applied for a loan, he says. He stresses that the online system ensures complete transparency. At any given time, donors have the option of seeing whether their donations have reached their intended source as well as checking up on the status of the business.

One question that arises out of this unique business model is that if the platform hands out interest-free loans, how are they managing to pay their employees and fulfil operational costs? Answering this query, Ashraf responds that donors have two options when donating; they can either donate to an individual or they can donate to the platform. However, majority of the expenses Ashraf pays out of his own pocket.

“Currently, many companies in Pakistan are working in the micro-financing sector. However, majority of them are taking interests of 30 to 40% from their customers,” he reveals.

Secondly, these companies hand out loans in the form of cold, hard cash. The downfall of cash is that individuals tend to spend that money elsewhere instead of using it to set up a business, Ashraf explains.

Instead of giving people cash, we buy goods for the person which cost can cost up to Rs0.2 million, he says.

Those who have benefitted from Seed Out have gone on to become mechanics and rickshaw drivers while some have also opened general stores. In a just a few days, those who were unable to afford a loaf of bread are now successfully running their own businesses, expresses Ashraf.

One such person says that before he used to make a living by driving a rickshaw owned by somebody else. “After a day’s worth of blood, sweat and tears, I would earn a meagre income and would still have to pay for any repairs or damage to the rickshaw,” he remembers. However, through Seed Out, he managed to buy his own rickshaw and is now earning enough money to send his children to a private school.

Another such individual, Bushra Bibi, says that she fell on hard times after her husband passed away. “I have three children and there were often times where there was nothing to eat in the house,” she says. I used to make ends meet by working as a helper in other people’s homes, but that was not enough for the household, she adds. With a little help from Ashraf’s venture, Bushra Bibi is now successfully running her own corner general store, adjacent to her home. “I can take care of my children while earning a living,” she states.

Ashraf has received many accolades for his NGO and has won many national and international awards. Ashraf says that his family has always supported him and encouraged him in all his endeavours and is still supporting him. Even if nobody chooses to donate, I can sustain the platform using my family’s support, the money which is in circulation and the money which is being received through instalments, he says.

“The inner peace I get from running this platform is incomparable,” he maintains.