Village banks secure livelihood in rural Cambodia
Lack of access to micro loans is one of the major challenges of livelihood improvement for poor people, especially women, in rural areas, They are forced to borrow from moneylenders if they want to set up or expand their business, or when any of their family members falls sick.
“Before the village bank existed, we had borrowed money from moneylenders in the village at a very high rate of interest ( 15% ) per month. Even at this rate, borrowing had been difficult. Sometimes, they had refused to lend us money because we are very poor,” said Ms Nuon Thoeun, one of the members.
Women’s Bank changed all this when they established village banks in rural Cambodia, helping women to access their rights to livelihood through the running of their own village banks in an independent and sustainable way.
Ms Tuot Mary, 30, who was newly elected as the leader of the Village Bank for the 3rd time said, ‘This village bank is very important for the poorest like us, especially for the poorest households headed by women in this Chraing Bak village.’
Mary, divorced with a 6-year-old daughter and an 18-month-old son, said most members borrowed the money from the Bank to buy vegetable seeds for growing, young hens, or piglets for raising. Some others used the loans to expand their small business such as selling snacks or grocery.
Besides working for the bank, she sells snacks in a school close to her house. She also grows vegetables for consumption and raises chickens.
Chraing Bak village bank of Battambang province now has a total capital of 6,914,100 riels (EUR 1 545). The number of members has increased from 51 to 57, and a fifth of them are widows and divorced.
Each member can borrow a maximum of 130,000 riels (EUR 36) with an interest rate of 3% per month. Members are allowed to pay installments monthly or whenever they can repay with the interest, but the remaining loan must be repaid at the end of a six-month cycle.
Every month members continue to deposit between 800 riels (EUR 0.18) and 1,000 riels (EUR 0.22) to the bank. At the end of the first cycle, members shared a dividend of 10,000 riels (EUR 2.24).
When asked to whom the bank belongs, they replied ‘It’s our bank. We are the owners. We want to see this bank grow from generation to generation’.
Text: Maija Sankari