Workers keeping track of savings at the Church-run credit unionMay 17, 2010
UCAN
A Church-run microfinance program introduced more than three years ago is helping to improve the livelihoods of many poor people in a parish in Cambodia’s capital.
“Last year, when my motorbike broke down, I thought I would have to take my children out of school, but luckily I was able to borrow 500,000 riel (US$118) from the credit union to repair my motorbike enabling my children to continue their studies,” said Meas Putry, a motorcycle taxi driver.
Putry is a signed-up member of the credit union of St. Joseph Church in Phnom Penh.
The program provides loans to poor people at the cheapest rate, said Saing Yuth, a former teacher and credit union administrator. She said loans are fixed at 1 per cent interest per month and without the need to provide collateral. Other credit institutions usually demand interest repayments of 4-5 per cent a month, she noted.
As well as the loan service, the Church credit union also has a savings account program, which gives savers an interest rate of 3 per cent per annum.
Parish priest Father Paul Roeung Chatchai introduced the credit and savings program in early 2007. “The Church’s main mission is to proclaim the Good News to the people. Our credit union is one way of doing this by providing a lifeline to poor people when they face difficult situations,” said the priest from the Thai Missionary Society.
Another objective, Father Roeung added, is to encourage and teach the local community to support each other and be less financially dependent on their families.
Initially starting with 30 members with savings totaling 170,000 riel, the program now has 170 members and 16 million riel’s worth of savings. A large amount of this is deposited in a commercial bank to earn interest.
“Our members can deposit as little as 1,000 riel per week into their savings account,” said Father Chatchai, adding that the Church has a 12-member committee that manages the program.
Putry says he now has 2 million riel in his account. “I thank God that this program has been introduced in our community,” he said.
In Cambodia there are 27 commercial banks, six specialist banks and 21 licensed micro credit institutions, according to a National Bank of Cambodia report.
“Last year, when my motorbike broke down, I thought I would have to take my children out of school, but luckily I was able to borrow 500,000 riel (US$118) from the credit union to repair my motorbike enabling my children to continue their studies,” said Meas Putry, a motorcycle taxi driver.
Putry is a signed-up member of the credit union of St. Joseph Church in Phnom Penh.
The program provides loans to poor people at the cheapest rate, said Saing Yuth, a former teacher and credit union administrator. She said loans are fixed at 1 per cent interest per month and without the need to provide collateral. Other credit institutions usually demand interest repayments of 4-5 per cent a month, she noted.
As well as the loan service, the Church credit union also has a savings account program, which gives savers an interest rate of 3 per cent per annum.
Parish priest Father Paul Roeung Chatchai introduced the credit and savings program in early 2007. “The Church’s main mission is to proclaim the Good News to the people. Our credit union is one way of doing this by providing a lifeline to poor people when they face difficult situations,” said the priest from the Thai Missionary Society.
Another objective, Father Roeung added, is to encourage and teach the local community to support each other and be less financially dependent on their families.
Initially starting with 30 members with savings totaling 170,000 riel, the program now has 170 members and 16 million riel’s worth of savings. A large amount of this is deposited in a commercial bank to earn interest.
“Our members can deposit as little as 1,000 riel per week into their savings account,” said Father Chatchai, adding that the Church has a 12-member committee that manages the program.
Putry says he now has 2 million riel in his account. “I thank God that this program has been introduced in our community,” he said.
In Cambodia there are 27 commercial banks, six specialist banks and 21 licensed micro credit institutions, according to a National Bank of Cambodia report.
6 comments:
does anyone do the analysis on this? pro, con and the future?
If for helping people in need, there should no interest charge to the loan. To charge interest is to do business like in the secular world. It's not biblical. and the debt should be canceled after 7 years time if the debtor could not pay back the loan.
Check the Bible and obey God Word.
This is a good news. Gov't needs to expand in a loan relates to free or little interest from poor people. Govt needs to have a welfare system to help aging parents, and children from o to 18. wisdom
9:44 AM In such schemes, interest should generally be charged at close to market rates - as otherwise the common pool of loanable funds will not grow to help others in the same economic conditions. it also encourage borrowers to get into profitable work. No where in the Bible is there an injunction against charging interest. There's plenty of condemnation of usury though.
It is a sad fact that for many dirt poor Cambodian living under AH HUN SEN regime never receive financial education and the know how to spend their money wisely whether for business or personal purpose so any form of loan is still a bad loan for them and the loan will only make them fall deeper into debt!
11:11pm "the loan will only make them fall deeper into debt!" we are not talking about usury here, but an opportunity for many who has zero assets or collaterals to borrow at concessional rates in order to fund start up businesses - like fishing, raising poultry, small retail trading etc.. that's the essence of microfinance - the empowerment of the poor via micro loans.
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