Small loans pull families in Cambodia out of poverty

Only 23% of people in rural Cambodia have access to financial institutions, so most rely on lenders who charge very high interest. This leads to a high level of debt among the most vulnerable households. Plan is working with partner organizations to expand microfinance services for the poor – focusing primarily on households led by women.

Hun Mai, an uneducated widow and mother of 7 in Siem Reap province, was a recipient of a small loan. Today, she is a successful shopkeeper, determined to educate and build a better future for her children.

Loan builds family security

"There was no school in my village and my parents were so poor that they could not afford my schooling," said 50 year old Mai. "Now that we have a school, I won’t let my children live like I did, without an education."

Plan Cambodia and partner organization, Krousar Yoeung Association (KrY), provided Mai with $100 to start a modest grocery stand in 2008. She now earns enough to ensure that her children are well fed, do not need to work, and can study without distractions.

"I want my children to have full stomachs from home so that they won't be hungry at school," she said as her youngest son, 12 years old, ate a healthy breakfast of rice with fried needle fish and a small bowl of beans.

With savings from her grocery stand, which earns her up to $70 per month, Mai has also bought livestock and started construction of a new house for her family – a long unrealized dream.

Small loans to combat poverty

Plan Cambodia has been working with KrY on the family empowerment project since 2008. According to KrY senior livelihoods assistant, Tong Seng, 487 vulnerable families in Siem Reap province have benefited. The 3 most popular businesses are groceries, scarf weaving, and animal husbandry.

"With our initial and ongoing counseling, we want to ensure that the money generated will be used properly for the sustainability of the business selected and that the long-term investment on children’s education and well being is prioritized accordingly," Seng said.

In 2010, Plan – in partnership with VisionFund Cambodia – expanded microfinance to 6 target districts, extending loans to 3,476 clients. More than 4 out of 5 of those clients are women, who are traditionally in charge of managing family resources, as well as children's education and health.

Learn more about Plan's work in Cambodia.