Showing posts with label Micro credit. Show all posts
Showing posts with label Micro credit. Show all posts
Wednesday, August 10, 2011
Tuesday, May 31, 2011
Cambodia microfinance: it's not all about credit, savings matter too
Tuesday, 31 May 2011
Guardian.co.uk
Guardian.co.uk
Liz Ford: Nobody is too poor to save, insists Care International, which supports community microfinance initiatives that offer safe and efficient ways to put money aside
Sarom Eng, 55, has five children. She perches on a wooden slatted bench in her village, Preytotung, in Battambang province, as she speaks about her business ventures. Family members, including her daughter and one of her five grandchildren, neighbours and animals mill around the garden that surrounds her small stilted wooden house as we talk. Lined up opposite the bench are huge plastic bags full of kapok fibres, which have been plucked from pods that hang from nearby ceiba trees, and are ready for sale.
Eng has developed a good seasonal business, buying the pods from farmers who have the trees on their land, and selling the kapok to companies that make mattresses and pillows. It has been funded through loans she's taken out from the Khum Chrey community-based microfinance organisation (CBMIFO). She's on her third or fourth loan now – the most recent for 1.5m Cambodian riel, about $370. She employs neighbours and family to help pluck and bag the kapok, and she expects to get a 50% rate of return when she sells her goods. "I've never had a problem with paying the money back. I usually pay back before I need to."
The income generated, along with money earned from selling fruit up along the Thai border and from growing rice in a field about 4km from her home, means she can support her children and grandchildren, and save money.
Monday, May 23, 2011
Cambodia's Micro-credit Trap
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| They could use a loan |
Monday, 23 May 2011
Written by Simon Marks
Asia Sentinel
India isn't the only place with problems
Roaming the streets as a motorcycle taxi driver in Dangkao district on the edge of Phnom Penh, Ek Sovannara is lucky to earn US$2.50 a day. But his aspirations once stretched much further.
In 2005 he was presented with an opportunity to borrow US$500 from Credit Microfinance Institution, a firm established by the Christian charity World Relief US in 1993, to set up a small food stall in Trapaing Krasaing commune where crowds of garment workers pass on their way to work. His decision that day to take the money would stay with him for years.
Since then, borrowing more and more from private lenders to pay back microlenders, he has fallen into a complicated web of debt now so severe that he is considering selling his house and about 50 square meters of land, together worth around US$6,000. Though he has managed to pay back some of what he borrowed, his business ceased turning a profit two months ago. After successive borrowing to repay other loans, Sovannara still owes US$1,520 to Credit Microfinance Institution and a further US$400 to seven private moneylenders.
Thursday, March 24, 2011
The Finnish Women’s Bank Women in Cambodia
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| These Cambodian women have received training in savings and loan operations, and are now managing the local village bank themselves. |
24 March 2011
ScandAsia.com
In 2007 a group of women from Finland visited a developmental project in Liberia, meeting a large number of hardworking women with a host of ideas. Given the chance to realise these plans, they could have improved the financial situations of their families, but they lacked support and access to financial resources.
In Asia, Women’s Bank is active in Cambodia and Nepal, operating primarily by financing village banks. Village banks operate in rural communities where financing services with reasonable interest rates are frequently out of reach for poor families. Village bank members are local women who, after receiving basic training in savings and loan operations, manage the bank themselves. The interest rate for loans is low and the local area benefits. Women have proved to be trustworthy clients: almost 100 percent of the loans are paid back on time.
Monday, January 10, 2011
Website - Thaneakea Phum [Village Bank]
Catholic News Asia
Thaneakea Phum (Cambodia), Ltd. is a microfinance institution that provides the rural poor with the economic opportunities to transform the quality of their lives through the provision of effective and sustainable, client-empowering financial services, according to its website.
Its goal is to reduce poverty and improve the standard of living and quality of life for the poor.
LINK: Thaneakea Phum
Monday, May 17, 2010
Church microfinance scheme is ‘Good News’ to poor
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.
Thursday, October 30, 2008
Small Loans Fresh Casualty of Credit Crisis
By Ros Sothea, VOA Khmer
Original report from Phnom Penh
29 October 2008
Original report from Phnom Penh
29 October 2008
A credit shortage spawned by the global financial crisis will mean less small loans to the rural poor.
One of the clearest sectors in Cambodia to be hit by the global credit crunch will be microfinance, limiting loans for small businesses among Cambodia’s poorest at a time when the system is just taking off, financial experts say.
The financial crisis that spread from a US mortgage meltdown and has shaken global markets will take money away from the international lenders that make microfinance possible, leaders of several Cambodian microfinance institutions said in recent interviews.
For Cambodia’s rising number of microfinance borrowers—mostly the rural poor who take small loans to start or expand local businesses—that means less money to go around and higher interest rates to pay back.
Micro-lender Amret will cut 10 percent of its loans to the poor in the coming year, the institution’s general manager, Chea Phalarin, said.
“We will reduce our mission in response to less foreign resources,” he said. “We will cut down the number of lenders.”
Amret had expected to make small loans to around 250,000 families in 2009, he said, but that number has been cut to an estimated 230,000. An extended financial crisis could mean even less people will be eligible for loans, he said.
Sem Senacheat, general manager of Prasac, a microfinance lender, said it will be a hard task now to find foreign lenders. Prasac has already seen a $10 million loan canceled thanks to the financial crisis.
“Loans that we had negotiated before were suspended by the lenders, and recently we have tried to contact many institutions we used to borrow from,” he said. “But most of them can’t offer us the money.”
Foreign lenders that can afford to make loans are doing so at higher interest, experts said, raising rates from an average 9 percent to as much as 11 percent. The higher interest will be passed on to borrowers.
An estimated 1 million Cambodians are benefiting from microfinance programs, up 73 percent from the beginning of 2008. The country has 17 microfinance institutions with a total capital of $270 million, typically loaned to rural villagers for small-sized businesses.
Chea Chanto, governor of the National Bank of Cambodia, has called microfinance the key to reducing poverty in rural areas.
But a slowdown means “people who need money to create new businesses or extend their businesses will be hurt,” said Kang Chandararoth, director of the Economic Development Institute.
Now, he said, microfinance lenders will have to amass local deposits, something local lenders say will be limited and far from able to reach the amounts of money foreign lenders can provide.
Micro-lenders also say they can’t seek loans from local commercial banks, because these are still not confident with microfinance systems.
The National Bank can’t help either; its reserves are too small.
“The National Bank can’t release much capital,” said Pal Nay Im, director of the National Bank of Cambodia. “Microfinance must find other new partners, especially the [World Bank’s International Finance Corporation], that don’t face a financial crisis.”
This will be hard as well, micro-lenders said. Lenders like the IFC or Asian Development Bank usually offer loans with higher interest rates, which would hurt borrowers.
For now, lenders are waiting to see how long the credit crunch will last.
“If the global financial crisis is not resolved as soon as possible, I am concerned that there will be a crisis in 2009," said Bun Mony, chairman of the Sathapana microfinance institution. “It means that our mission will be reduced to its lowest point.”
One of the clearest sectors in Cambodia to be hit by the global credit crunch will be microfinance, limiting loans for small businesses among Cambodia’s poorest at a time when the system is just taking off, financial experts say.
The financial crisis that spread from a US mortgage meltdown and has shaken global markets will take money away from the international lenders that make microfinance possible, leaders of several Cambodian microfinance institutions said in recent interviews.
For Cambodia’s rising number of microfinance borrowers—mostly the rural poor who take small loans to start or expand local businesses—that means less money to go around and higher interest rates to pay back.
Micro-lender Amret will cut 10 percent of its loans to the poor in the coming year, the institution’s general manager, Chea Phalarin, said.
“We will reduce our mission in response to less foreign resources,” he said. “We will cut down the number of lenders.”
Amret had expected to make small loans to around 250,000 families in 2009, he said, but that number has been cut to an estimated 230,000. An extended financial crisis could mean even less people will be eligible for loans, he said.
Sem Senacheat, general manager of Prasac, a microfinance lender, said it will be a hard task now to find foreign lenders. Prasac has already seen a $10 million loan canceled thanks to the financial crisis.
“Loans that we had negotiated before were suspended by the lenders, and recently we have tried to contact many institutions we used to borrow from,” he said. “But most of them can’t offer us the money.”
Foreign lenders that can afford to make loans are doing so at higher interest, experts said, raising rates from an average 9 percent to as much as 11 percent. The higher interest will be passed on to borrowers.
An estimated 1 million Cambodians are benefiting from microfinance programs, up 73 percent from the beginning of 2008. The country has 17 microfinance institutions with a total capital of $270 million, typically loaned to rural villagers for small-sized businesses.
Chea Chanto, governor of the National Bank of Cambodia, has called microfinance the key to reducing poverty in rural areas.
But a slowdown means “people who need money to create new businesses or extend their businesses will be hurt,” said Kang Chandararoth, director of the Economic Development Institute.
Now, he said, microfinance lenders will have to amass local deposits, something local lenders say will be limited and far from able to reach the amounts of money foreign lenders can provide.
Micro-lenders also say they can’t seek loans from local commercial banks, because these are still not confident with microfinance systems.
The National Bank can’t help either; its reserves are too small.
“The National Bank can’t release much capital,” said Pal Nay Im, director of the National Bank of Cambodia. “Microfinance must find other new partners, especially the [World Bank’s International Finance Corporation], that don’t face a financial crisis.”
This will be hard as well, micro-lenders said. Lenders like the IFC or Asian Development Bank usually offer loans with higher interest rates, which would hurt borrowers.
For now, lenders are waiting to see how long the credit crunch will last.
“If the global financial crisis is not resolved as soon as possible, I am concerned that there will be a crisis in 2009," said Bun Mony, chairman of the Sathapana microfinance institution. “It means that our mission will be reduced to its lowest point.”
Thursday, May 15, 2008
[Micro credit:] The Kiva Connection: Exclusive Interview from Cambodia
Here Phal An is pictured in front of her rice wine production area with one of her sons, who helps contribute to the business. (Photo: Jessica Young)May 14, 2008
by Tamara Schweitzer
Global Business, Kiva
When I set out to blog about the entrepreneurs that Mansueto Ventures sponsored through Kiva.org, I wanted to provide readers with as many details as possible about the day-to-day lives of small business owners in developing countries and how exactly access to microfinance was impacting their operations.
As you can imagine, it is not a simple task to connect directly with entrepreneurs in developing communities, as most do not have access to communication technology. So far, what I have learned about the entrepreneurs we sponsored and what I have reported here on this blog has come from examining the background profiles and photos posted on Kiva's website of each borrower. However, this snapshot is only part of their story, and as a journalist, I felt it my duty to uncover as much of the individual's story as possible.
This is where Kiva comes in. The organization's staff has been amazingly instrumental in getting me access to the information I desired. I have connected with several Kiva fellows, volunteers who are stationed in countries all over the world where Kiva has microfinance partners. These fellows are working on the ground to facilitate the smooth transaction between the local lending institutions and their clients. As such, many of these fellows have the chance to visit with entrepreneurs in their homes and places of business.
Jessica Young, a fellow working with one of Kiva's microfinance partners in Cambodia, was able to arrange a meeting with Phal An, a rice winemaker in Cambodia, and one of the entrepreneurs we loaned to through Kiva. Jessica graciously agreed to bring my interview questions to Phal An and report back with her answers. In order to conduct the interview in Phal An's native language of Khmer, Jessica brought along Phal An's loan officer, Mr. Kiry, to act as translator.
Jessica visited with Phal An at her home in late March, and since then there have been several e-mail exchanges between us detailing the experience. Here is an excerpt from one of Jessica's e-mails (with some words added or changed for clarification purposes) in which she describes her journey to Phal An's home in the village of Damnak Sankae and the nature of their meeting:
After the interview, Jessica provided me with such a wealth of information about Phal An's winemaking business, as well as photos of her winemaking equipment, that I felt it important to share her story with readers beyond just those who follow this blog. Here is the link to the extended Q&A with Phal An, and another to a slideshow that depicts the process of making the rice wine. The interview with Phal An helped to shed light on the significance that one small loan can have to a hopeful entrepreneur.
I am grateful to everyone who has helped me relay Phal An's story, and to tell it accurately. A special thanks to Jessica for stepping into the journalist's role and reporting everything so thoroughly.
As you can imagine, it is not a simple task to connect directly with entrepreneurs in developing communities, as most do not have access to communication technology. So far, what I have learned about the entrepreneurs we sponsored and what I have reported here on this blog has come from examining the background profiles and photos posted on Kiva's website of each borrower. However, this snapshot is only part of their story, and as a journalist, I felt it my duty to uncover as much of the individual's story as possible.
This is where Kiva comes in. The organization's staff has been amazingly instrumental in getting me access to the information I desired. I have connected with several Kiva fellows, volunteers who are stationed in countries all over the world where Kiva has microfinance partners. These fellows are working on the ground to facilitate the smooth transaction between the local lending institutions and their clients. As such, many of these fellows have the chance to visit with entrepreneurs in their homes and places of business.
Jessica Young, a fellow working with one of Kiva's microfinance partners in Cambodia, was able to arrange a meeting with Phal An, a rice winemaker in Cambodia, and one of the entrepreneurs we loaned to through Kiva. Jessica graciously agreed to bring my interview questions to Phal An and report back with her answers. In order to conduct the interview in Phal An's native language of Khmer, Jessica brought along Phal An's loan officer, Mr. Kiry, to act as translator.
Jessica visited with Phal An at her home in late March, and since then there have been several e-mail exchanges between us detailing the experience. Here is an excerpt from one of Jessica's e-mails (with some words added or changed for clarification purposes) in which she describes her journey to Phal An's home in the village of Damnak Sankae and the nature of their meeting:
We arrived [at the home] about an hour before lunch time, so [Phal An and her family] were already starting to prepare to cook the food. Her husband was at home, as was her son, so during the course of the interview they would take turns adding hay to keep the fire [for the rice wine] going. The overseeing of the rice wine production is an ongoing activity throughout the day. [Phal An] invited us to sit down, answered all of our questions and offered us water and mango. It's common for clients to offer tea or water when greeting you in their homes.
Also present was her daughter who now has a child, so the family was playing with the baby. During the course of the interview her second son came home, as families will typically eat lunch together. Traditionally, it is the woman's responsibility to prepare the meals and look after the house, so she, like most of the female clients, will begin work around 7 A.M. and take two main breaks -- one to cook lunch and one to prepare dinner. In Phal An's case, she can do this while she simultaneously looks after the rice wine. Because she runs the side business of pig raising, she also has to tend to the pigs, feeding them and giving them medicine to prevent them from getting sick.
She was expecting us [for the interview] because another loan officer who is assigned to her district stopped by to see if she was home and give [Mr. Kiry and I] directions. Most homes are off the paved national roads, on side dirt roads, reached by cutting along paths in between people’s houses. As they’re unmarked, they can be difficult to find if you haven’t been there before, unless a local villager is familiar with the name and can point you in the right direction.
After the interview, Jessica provided me with such a wealth of information about Phal An's winemaking business, as well as photos of her winemaking equipment, that I felt it important to share her story with readers beyond just those who follow this blog. Here is the link to the extended Q&A with Phal An, and another to a slideshow that depicts the process of making the rice wine. The interview with Phal An helped to shed light on the significance that one small loan can have to a hopeful entrepreneur.
I am grateful to everyone who has helped me relay Phal An's story, and to tell it accurately. A special thanks to Jessica for stepping into the journalist's role and reporting everything so thoroughly.
Friday, February 29, 2008
Cambodia: promoting economic security among victims of landmines
28-02-2008
International Committee of the Red Cross (ICRC)
International Committee of the Red Cross (ICRC)
Despite the enormous efforts made during the past 12 years to rid Cambodia of the scourge of mines and other explosive remnants of war, several hundred people continue to be maimed or killed by these weapons in the country every year.
Promoting economic security among survivors and potential victims of landmine accidents
According to the Cambodian Mine Victim Information System, 80% of the victims in 2004 admitted they were aware of the danger. Nevertheless, they were forced to engage in risky pursuits (such as collecting scrap metal or clearing dangerous areas for farming) simply in order to survive.
Based on this finding, the Cambodian Red Cross Society started a micro-credit project in 2005 to support the economic integration at community level of amputees who would have carried on taking risks had an alternate form of income generation not been available. The scheme had 18 beneficiaries in 2005 and initial results were encouraging.
In 2006 the project was expanded so as to target not only economically vulnerable mine survivors but also so-called potential victims, i.e. people who take daily risks with mines and other lethal debris of war. The aim is to prevent or at least reduce the number of accidents by providing economic alternatives that allow people to avoid taking risks.
How the project works
The Cambodian Red Cross micro-credit project relies on community meetings – organized to provide information on the risks posed by mines – to identify economically vulnerable mine survivors and potential victims.
Those selected receive small loans (items worth up to 200 US dollars) enabling them to start generating an income (by raising pigs, farming, opening a shop, operating a water pump, etc.) sufficient to meet their basic needs. The type of activity depends on the recipient’s skills and motivation and on the needs in each village – the support given is agreed upon with community leaders. A contribution in kind is always made by the beneficiary or in some cases the community.
The project is managed on a revolving-fund basis. Its loans are interest-free, but beneficiaries must repay them in cash within 12 months. The length of the payback period depends on the type of business and on the beneficiaries’ circumstances. Repaid funds are immediately reinvested in the form of new loans to a new group of beneficiaries.
During the 12-month loan period, Cambodian Red Cross volunteers and development officers remain in close contact with beneficiaries in order to monitor progress, assess results and offer advice. With financial support from the German Red Cross, small loans were made to 80 people in 2006 and to around 200 in 2007.
Ongoing support for the disabled
Promoting economic security among survivors and potential victims of landmine accidents
According to the Cambodian Mine Victim Information System, 80% of the victims in 2004 admitted they were aware of the danger. Nevertheless, they were forced to engage in risky pursuits (such as collecting scrap metal or clearing dangerous areas for farming) simply in order to survive.
Based on this finding, the Cambodian Red Cross Society started a micro-credit project in 2005 to support the economic integration at community level of amputees who would have carried on taking risks had an alternate form of income generation not been available. The scheme had 18 beneficiaries in 2005 and initial results were encouraging.
In 2006 the project was expanded so as to target not only economically vulnerable mine survivors but also so-called potential victims, i.e. people who take daily risks with mines and other lethal debris of war. The aim is to prevent or at least reduce the number of accidents by providing economic alternatives that allow people to avoid taking risks.
How the project works
The Cambodian Red Cross micro-credit project relies on community meetings – organized to provide information on the risks posed by mines – to identify economically vulnerable mine survivors and potential victims.
Those selected receive small loans (items worth up to 200 US dollars) enabling them to start generating an income (by raising pigs, farming, opening a shop, operating a water pump, etc.) sufficient to meet their basic needs. The type of activity depends on the recipient’s skills and motivation and on the needs in each village – the support given is agreed upon with community leaders. A contribution in kind is always made by the beneficiary or in some cases the community.
The project is managed on a revolving-fund basis. Its loans are interest-free, but beneficiaries must repay them in cash within 12 months. The length of the payback period depends on the type of business and on the beneficiaries’ circumstances. Repaid funds are immediately reinvested in the form of new loans to a new group of beneficiaries.
During the 12-month loan period, Cambodian Red Cross volunteers and development officers remain in close contact with beneficiaries in order to monitor progress, assess results and offer advice. With financial support from the German Red Cross, small loans were made to 80 people in 2006 and to around 200 in 2007.
Ongoing support for the disabled
- The ICRC has provided tecnical support to the Cambodia Red Cross' programme to reduce impact of mines and explosive remnants of war since 2006.
- The ICRC has been providing support for victims of mines and unexploded ordnance in Cambodia for years. This is done through the orthopaedic and rehabilitation centres in Kompong Speu and Battambang (in cooperation with the authorities) and the ICRC orthopaedic component factory in Phnom Penh. Services are provided to patients, including those suffering from disabling diseases, free of charge.
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