Low Interest, High Impact

Women Benefit From Small Business Loan Program

When Sou Phalla got married, she thought her husband could take care of providing for the family without her help. But as time went by and the couple kept having more children until the number grew to nine, their living condition became worse and worse.

During those years Sou Phalla often thought of helping out her husband by making some money of her own, but she didn’t act until last year, when her husband had an accident and could no longer work as a carpenter.

When a neighbor told her about a low interest microcredit loan she could get from the Association of Cambodian Local Economic Development Agen­cies, or Acleda, she knew where to turn to become a small businesswoman.

“Acleda can help women, especially woman who are widows and have several children,” said Sou Phalla, 45. “With money from Acleda she could help herself and support her children by herself.”

Microfinance programs were introduced as a grassroots way to help the poor, and for Acleda, that means helping more women make money for themselves and improve their positions in society.

More than 80 percent of Ac­leda’s estimated 56,000 clients are women who have small businesses, and many are repeat borrowers who need another loan to expand their business. Acleda has provided more than $15 million in loans as of Sept 30.

“Women are borrowing from Acleda to help their families earn a basic living,” said Timothy Krause, representative of the International Finance Corp. “With small amounts of money and a great deal of commitment, Acleda is reaching out to the rural poor.”

In Channy, general manager of Acleda, said Acleda gives first priority to female borrowers and said woman today are rejecting the view that they have to stay at home and are weaker than men.

“Women today have completely changed from the old generation,” he said. “When I interview wives and husbands, the husband always tells me that, ‘Everything is up to my wife.’”

Sou Phalla, who lives in Phnom Penh’s Meanchey district, began her business by selling rice with pork and other simple dishes. As her business grew, she added a small room to her shop for customers to sing karaoke. When she needed to expand again, she turned to Acleda.

Last year she was approved to borrow $1,500 from Acleda to open a karaoke business. On Tuesday, she was at Acleda again to borrow another $1,500 to expand the business so she can sell drinks to customers.

With the money, she also helped out her husband by giving him almost $80 for his fried noodle business. She said other places charge $10 in interest for a $100 loan, but Acleda charges $2 in interest for the same loan.

“Since I borrowed the money, our living condition is good,” she said. “On a good day, I can make $50 a day.”

Chea Vannath, president of the Center for Social Development, said she has seen “many Cam­bo­d­ian women run successful businesses, and it just goes to show that women can be leaders of the country.”

Acleda was established in 1993 as a national NGO for micro and small enterprises development and credit. In the years since, Acleda has been expanding its services to 13 provinces and making a profit, prompting Acleda’s board to consider transforming the NGO into a commercial bank.

Two weeks ago, a ceremony was held for the grand opening of Acleda Bank. Now Acleda is facing the challenge of operating as a commercial bank, such as establishing deposit accounts and protecting its depositors while still making a profit.

One way Acleda is hoping to meet the challenge is through word of mouth.

Phat Pov, 34, heard about Acleda through neighbors in Phnom Penh’s Dangkao district. She proposed starting a convenience store and snack shop and told Acleda in 1998 she needed $500 to start her business.

The loan was approved, and business became good enough that she was looking to expand. She again turned to Acleda and borrowed an additional $1,000.

She was back at Acleda for the third time a few days ago to ask for another $600 to add more products to her store.

“At other places, the interest rate is similar but you have to pay back the money in a shorter amount of time,” she said.




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