Jan 07 - 13, 2008

Following are the views given by T.U. Dawood, CEO, Dawood Capital Management Ltd on how it is helping the overall society towards education planning and saving for the children's education.

The following will answer the questions about education, like what does he think why the price of education is getting higher and despite all efforts a common man is unable to provide a good education to his/her children, how will it affect the overall human resource development in years to come and how much will it widen the gap between the segments of society which is already fragmented, how best can we help the society to give good education on a reasonable price.


The value placed on knowledge in the Holy Qur'an became the foundation for the development of education in all its different expressions throughout Muslim history. In the Holy Qur'an there are 704 verses in which either the word "ilm" or the words of the same derivation appear.

We at Dawood Capital Management Ltd. (DCM) believe in the importance of a child's education and attainment of "ilm" and recognize how critical this is for the development and betterment of our nation's future. BABYFUND allows a parent to save regularly towards a child's education, health or marriage needs. It helps a parent prepare for their child's future in a tangible way, with each financial statement reflecting the parent's commitment to their child.

Saving for and educating a child is an imperative duty for each parent all over the world. Sadly, despite the importance placed on "ilm" in Islam, the Islamic Republic of Pakistan has one of the lowest literacy rates in the world. According to the CIA World Factbook, Pakistan's literacy rate stands at 49.9%, which is split approximately 65/35% between the Male/Female gender divide respectively. This sadly places us in the same category as nations such as Benin, Burkina Faso, Mali, Nepal, the Niger and Yemen according to UNESCO. In fact, according to UNESCO, Pakistan has the highest number of children out of school with the exception of Nigeria.

Generally across the globe, The State often provides the opportunity to avail of free or heavily subsidized education. Bearing in mind the economic status of the country, in terms of GDP, Pakistan's problems in terms of providing education to its citizens are further compounded by the fact that under 4% of GDP is allocated to Education. We are seeing a rising number of NGOs stepping in to the country to try and provide education which, though noble, reflects poorly on us as a State.

Added to this is the growing level of corruption in the domestic examinations, thereby negating the value of a state-provided education.

This lack of funding has meant that the education that can be provided is of a very low standard and has resulted in the rise of the private sector schools to fill this gap. It is no surprise that Pakistan is entered in the Guinness Book of Records as the country with the largest private school network. The private sector however is a business, which has to budget for inflation, and increasing competition to retain trained staff. This results in the rising cost.

Interestingly, we are also a nation of poor savers. Out Gross Domestic Savings rate as a percentage of Gross Domestic Product also remains one of the lowest in the World. The correlation between savings and education is not lost on us at Dawood Capital Management or on the Government, who are supporting this goal by offering tax rebates to investors in BABYFUND. This benefit can be as much as Rs. 57,000 on an investment of Rs. 300,000, allowing you to thereby easily outstrip inflation.

BABYFUND is 5-star rated by the Pakistan Credit Rating Agency (PACRA) and has consistently outperformed the benchmark interest rates and inflation since its inception. Ideally we would advise a parent to save whatever they can on a monthly basis (our INSTASAVE program), which is allowed as the fund has no minimum fixed investment requirement, giving it unparalleled flexibility. This money can then be used as and when the child needs it, although we encourage parents to save until their child reaches the age of 18 when the funds become available with the maximum benefits and no charges.

BABYFUND is also now available in shariah-compliant version for the first time. This provides a halal savings plan for Pakistanis who want to fulfill their Islamic desire for "ilm."

Unless we can address our savings habits, we as a Nation will be hit in terms of Human Resource development and will fragment the society further. Looking at the disparity that exists when someone first enters the workplace, these difficulties are evident with the Local Degree packages differing so greatly from an Overseas Degree package. Investing in BABYFUND for your children can help them have choices that you the Reader may not have had.

Unless we can as a Nation start planning for our children's future, we shall face severe problems in the years to come. We do not claim to have all the answers to the problems facing a child vis a vis education, but we believe BABYFUND by Dawood, is a very important first step towards beginning to make a difference in your child's life.