Businesswomen Credit Micro-Loan Program

A Phnom Penh merchant explained Wednesday how she parlayed a loan worth $22 into one worth $270 as well as a prosperous fruit and cashew nut business.

“At the beginning, I bought only five sacks of goods, but I gradually bought 20 sacks to a full truck because my business is such a success,” the woman said.

The woman was speaking near the Tonle Bassac area in Phnom Penh at a meeting marking the Gateway program’s milestone of reaching 20,000 women in Cambodia with $2 million in loans. The six-year-old micro-finance program is operated by World Relief Cambodia and its local NGO Partner, Cambodia Community Building.

Gateway is like many other micro-credit or village banking programs attempting to jump-start businesses, with perhaps a different twist: It also teaches health education. In fact, the program boasts of being the largest health-education program in the country.

At Wednesday’s “community bank” meeting, more than 50 women from the Tonle Bassac area got an earful from two Cambodian NGO workers about how they can protect their families from getting diarrhea. Other health issues targeted are malnutrition, dengue fever, AIDS and respiratory infections.

Joel Copple, country director of World Relief Cambodia, said the clients on average have had only three years of formal education so such basic health education is deemed critical.

“Before they ever receive a business loan, they have to pay 500 riel a week [in savings] and have six weeks of training,” Copple said.

Once they do receive loans—usually about $40 to start—they have to make weekly installments and be part of a “solidarity” group that guarantees repayment.

The process seems to work, NGO workers said. The program, which operates in four provinces, shows a loan recovery rate of 99 percent and an on-time repayment rate of 96 percent.

The women borrowers (there are only women borrowers) have saved more than $300,000, which they have used for emergencies and expanding their business.

Finance Minister Keat Chhon gave the program a ringing endorsement Wednesday. He said he was impressed the program also was educating people about health issues.

But Keat Chhon also noted that a hundred times more money is needed to truly make an impact on poverty, and he warned those in attendance not to squander their savings on alcohol.

As the squatter families were leaving the meeting, Som Sam Aun said a small loan worth $5.40 has been instrumental in improving her vegetable-selling business.

With her husband ill, that business supports the family.

The 42-year-old mother of two said, “Since I was lent the money, my business is better and so is our living condition.”

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