Focus Cambodia
Introduction
Cambodia is one of the poorest countries in the world. Approximately 78% of the population live on less that £1.40/€1.60 per day and 45% of all children are underweight. The average annual income is about £300/€350. Despite significant economic growth since the mid 1990's, and government efforts to invest in infrastructure, health, and education, the country faces the impact of a food crisis and the global financial crisis. The food crisis and ‘credit crunch’ have bitten deep:
- Rising costs of fossil fuels and fertilisers have left families struggling to produce rice.
- Flooding and droughts have reduced rice production causing a price hike that has doubled the price of rice in a year.
- With no income or capital to pay for fertilisers or run increasingly costly machinery, rural families already living in poverty are struggling to produce enough rice to feed their families.
- The level of capital available to Micro Finance Institutions (MFIs) has fallen due to the global credit crunch. This has forced the institutions to increase the rates of interest on loans making them less affordable and more risky for the poor.
Project Details
Working with the local church, our Tearfund partner, the Wholistic Development Organisation (WDO), is transforming communities through self-help projects that provide credit to the poorest of the poor. These projects are jointly funded by communities themselves and by the WDO through micro-loans to families, and micro-grants to village based initiatives. The loans and grants go to support environmental and income generating projects. These grants are vital because without them income generation and environmental projects could not get started: micro loans from commercial financial institutions or more informal cash loans require a level of interest that poor communities served by WDO cannot meet.
Over the past few years, WDO has been able to work with 20 village groups, and has seen 777 families join 188 low-interest loan groups; 11 rice banks have been initiated, with 3,428 individuals receiving rice loans. WDO has also granted a total of 4,035 tree seedlings to 453 families. WDO’s aim is that within five years, villages will become self-sustaining and WDO can further extend their work to different groups of people.
'Credit Where Credit’s Due' — A Success Story
San Nin and the Village Rice Bank:The village Rice Bank provides its members with micro loans in the form of rice seed. This is cheaper than buying the seed at market. After the harvest beneficiaries of the scheme return a little of their rice crop to the Bank. This is the equivalent of 'interest' on the loan. With the 'interest' the Rice Bank is both sustainable long-term and is able to expand its work to help more people year on year. The group is a great example of how with a little help—giving credit where credit’s due—lives can be transformed. As the scheme has developed, villagers have met regularly to share farming ideas and discuss the level of savings and repayments. They have been empowered to take control of their lives.
Take San Nin as an example:
San Nin is a widow who cares for her three children and her 78-year-old mother. San inherited many debts from her late husband, leaving her struggling to make ends meet. Before she came across WDO, her life was becoming increasingly difficult and she was very unhappy, for it had become evident that she couldn’t continue paying her 15 year-old daughter’s school fees, so her daughter had to leave school to work as a labourer in a wood-cutting factory.
San started attending training courses run by WDO. San cannot read but she was still confident that she would benefit from the training. When San joined she said, “Although I cannot read, I still have ears to listen and a mouth to askquestions.”
San then volunteered to work with WDO to facilitate rice banks in the community. In 2008, the Rice Bank attended by San Nin provided resources for 165 families in total and many families were able to reduce and pay off debts enabling them to better support their families.
As well as rice banks, San Nin works to facilitate the construction of wells, and give agricultural training in the village.Through the micro loans scheme San also got a loan from WDO to buy one pig so that she could start pig farming. Today, she has five pigs and this has become a small farming business. She can now afford to send her two youngest children to school.
When we support this year’s 'Credit Where Credit’s Due' World Development Appeal, we:
- Provide families with loans that they will invest in a family business.
- Provide families with grants of fruit tree seedlings that improve the environment, the family’s diet, and bring in a household income.
- Provide families with micro-grants to buy pigs, as an ongoing income generating venture.
- Enable villages to receive basic skills in business management to ensure that their investments create long lasting returns for the community.
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