Kiva Stories from the Field

Serving the Ordinary: The strength of microfinance

30 March 2010 at 06:35 voyageons 3 comments

Gemma North, KF9, Cambodia

Four months ago, my starry-eyed impression of microfinance was shaken during my first interview with a borrower (on my third day as a Kiva Fellow with CREDIT MFI), who told me that she had pulled her children from school so that they could help with her business. Though this reveals a possible negative impact of microlending, I have come to discover that what is attractive and important about this development tool is precisely that it is not glamorous or sexy.

There are countless times when I have met clients who tell me that their funds went towards buying additional inventory to stock their grocery store or food stand–with items like small packets of shampoo, fish-flavored crackers, gasoline, mangoes, or maybe some rice cakes or fried bananas. Almost as common are the borrowers that used their loan to buy a motorcycle to get to work more quickly than they do on a bicycle and to save on moto-taxi fees. During my first interviews, I was nearly (and selfishly) disappointed that I was not speaking to a brave new entrepreneur that is becoming not only economically but more socially independent by having access to financing. Yet now I take great comfort in the fact that the majority of these clients’ situations or circumstances, their businesses, are quite common in Cambodia. They are people with children or elderly parents who sometimes need money to smooth over their household consumption, to pay for school fees, to cover medical costs, to buy seeds or fertilizer, to buy a moto… They use their skills– be it farming, making food or palm sugar, being a good salesman or laborer–as a means to generate some funds for their families.

When my grandfather talks about life growing up on a small farm in the 1920s, he explains that the concept of a job, a business, or workweek was foreign. His family and their neighbors just did what was necessary–at whatever time it was needed and often with friends and family–to keep everyone fed, clothed and have some money to buy the items they couldn’t make. For most of the CREDIT clients I have talked to that is exactly the case: their work, their businesses are part of their everyday life and evolved out of what they already knew how to do. This is manifested daily when I walk through Phnom Penh and marvel at the vibrancy of the streets, the sheer number of businesses on the sidewalks, started by people who are just trying to earn an income. A man is sitting on a stool sharpening knives against a stone block, an older woman at the market carries a scale and charges a small fee for people to weigh themselves, a mother has set out a tray of homemade coconut cakes and some sliced fruit outside her doorway to sell, a family is raising chickens on the sidewalk outside their house in a makeshift cage of wire and tin cans… Then there are the myriad of food carts, barber shops, tailors, internet cafes, eateries, manicure stands, bike repair shops—all of which require an investment in equipment but are still just operating out of people’s homes, being run by various members of a family. These endeavors, these small businesses, this creativity and resourcefulness, this way of life–these are the individuals who should and are receiving loans and support from MFIs and lenders such as yourself (because they usually are not bankable but are doing what they must to support themselves and their families).

So in the end I have come to love these everyday stories, such as meeting another client who holds a food stand on the corner, as it demonstrates the accessibility, the no-frills simplicity of microfinance that make this development tool effective and wide-reaching.

Support and entrepreneur in Cambodia today, check out CREDIT MFI’s current fundraising loans!

Vichet and Riphin, CREDIT MFI's Kiva staff, seeing me off at the airport.

Gemma North has finished her Kiva Fellowship at CREDIT MFI and can’t thank the staff enough for being such wonderful friends and teachers.

Entry filed under: KF9 (Kiva Fellows 9th Class). Tags: CREDIT MFI, Gemma North Cambodia.