Microfinance at work

See how CBF microloans are having impact around the world in countries like Bosnia, Peru, and Cambodia. 

Bosnia, Microfinance Institution: MI-BOSPO

       MI-BOSPO is one of the leading MFIs and one of the most successful ones in Bosnia and Herzegovina in providing loans to business women. In more than a decade, MI-BOSPO has provided loans to more than 90,000 economically active women totaling over €100 million (€=euro).  Currently over 23,000 business women are in its lending program, and its outstanding portfolio exceeds €23 million.
       MI-BOSPO’s mission is to provide long-term financial services to economically active women in order to help them improve their well-being and the well-being of their families.  MI-BOSPO prides itself on its excellent client service and provides loans through two lending methodologies: solidarity group and individual lending. MI-BOSPO lends for agriculture, trade, services and small production activities.  Recently MI-BOSPO introduced loans for living conditions improvement including housing, car registration, wedding, seasonal-family and scholarship. MI-BOSPO is also involved in social projects such as providing support and care for orphans and raising awareness on cancer and other illnesses.

Borrower Story- Tifa Patković
       Tifa Patković is the first woman whom MI-BOSPO lent money to in April of 1996. Tifa, along with her husband Huso, and their sons were expelled from Vlasenica and came to Živinice with nothing.  She was living in one house and immediately started attending BOSPO psycho-social centre. She was asked what she would do if she had some money. “I know what I would do, what I have always done - work with cows, that is what I would do.”
MI-BOSPO gave Tifa $330 in April 1996, to be repaid fully in September that year. This was not enough to buy a cow, so Tifa bought a goat. This goat not only produce a lot of milk, but also 4 baby goats. When MI-BOSPO came to collect the repayment, they saw the goat, the baby goats and $330 and told Tifa that she could borrow more money.
       “I sold the goat, my son sent me $330 from Austria and I bought my first cow,” says Tifa.  She generated income by selling milk, cream and cheese to her neighbors. With the proceeds, Tifa says, “I built my first house but it was too small for me, only 300 square meters, so we built another one.  My son, who is living with us, will move to the smaller house and hopefully will get married and settle down.” Tifa and her husband Huso also have land with where they raise 5 cows.  Currently Tifa and her family have a €5,000 loan from MI-BOSPO.

 

Peru, Microfinance Institution: PROEMPRESA

       PROEMPRESA was established in 1997 as one of the entidades de desarrollo de la pequeña y micro empresa (“Edpyme”), or small- and micro-enterprise development companies, of Peru.  Since its inception, PROEMPRESA has focused its efforts on financing low-income microentrepreneurs, particularly those active in handicrafts, medicinal plants, agro-industry, ceramics, clothing and textiles, on the outskirts of the capital city Lima.
Today, PROEMPRESA is the fourth largest of the 13 Edpymes in Peru.  Its loan book accounted for approximately 11% of all Edpyme microlending in 2007.  PROEMPRESA offers loans for working capital as well as for equipment and overall business modernization.  It is also beginning to offer housing loans and it plans to launch remittance and micro-insurance products.  Additionally, through its non-profit parent, PROEMPRESA offers complementary services in business training and connections with suppliers and distributors.    
       As of June 2008, PROEMPRESA had over 38,000 active borrowers and a gross loan portfolio of approximately $43 million.  PROEMPRESA currently has 18 branches and six satellite offices.  Its main office is located in Lima, where they have an additional 12 branches located in the outskirts of the city.  While its client base is overwhelmingly urban, many clients are internal immigrants originally from rural areas who migrated to Lima in search of economic opportunity. With an average loan size of approximately $877, it is over 50% female client-based, and the majority of its loans are made to low-income individuals, PROEMPRESA has maintained a strong commitment to its target market since inception.  

Borrower Story – Fredy Rojas Landa
       Mr. Fredy Rojas Landa is a 38-year-old artisan specializing in wood and silver crafts.  Fredy is a lifelong artisan who previously spent 15 years working with textiles and fabricating tapestries.  Fredy was forced out of the tapestry business as he and other artisans faced capital deficiency issues.  He moved his family to Canto Grande, where he began his new trade and hoped for a better life for him and his family.  Although he had economic problems, he believed in his new craftsmanship in wood and silver and knew it would go well if he were able to obtain capital to expand his business.  Fredy secured a $166 loan with PROEMPRESA and was able to purchase the raw materials essential for his business.  With the raw materials and Fredy’s unique approach to the craft, his business grew rapidly. 
       “Everything I have worked for has been for my family to overcome the extreme poverty we came to live in because of my previous business failure.  My business recovery has united my family, and all of us are now on the road to success” Fredy said.  “I’ve been able to fulfill my dreams and my children are benefiting from my success.  I’ve also been able to involve all of my employees so that they can become future leaders.”

Cambodia, Microfinance Institution: Hattha Kaksekar Limited (HKL)

A Cambodian non-banking financial institution, HKL was the first Asian MFI to join DWM’s list of portfolio countries.  With a gross loan portfolio of US$ 7.4 million and a client base of over 11,500 active borrowers as of May 2007, HKL is determined to grow further in size and continue strengthening its geographic penetration.  HKL employs 248 staff and serves 72% women and 65% in rural areas.  In 2007 it had 23,253 clients, and the majority of its loans, by client business, go toward trade and commerce.

Borrower Story- Client Sim Sok
       Sim Sok, 32, went to a HKL office to request a loan of US$300 to buy a second-hand motorbike for her husband who was unemployed, to use both as a motor-taxi to support their family and also to transport groceries from the provincial market to their home for his wife’s business.
       After she completed the first loan cycle, she decided that motor-taxi driving is hard work that generates low income. Therefore, in the second loan cycle she borrowed $500 to buy an oil-run generator for charging customers’ batteries. The battery charging business has been successful because it is the only business in the community to provide this necessary service to rural Cambodians. The rural people of Cambodia do not have electricity, so nearly all families use batteries to power televisions, lights and other electronics.
       Her last loan cycle of $3,000 was used to increase the stock of her grocery business to meet customer demand, buy a new motorbike for her family’s transportation, and install a rice mill to create a rice milling business.  Sim Sok said, “I started my grocery business with a very old bicycle, then used the first loan to buy a second hand motorbike. That was the bridge which brought me to owning two motorbikes now, an old one for business and a new one for my family. I run multiple businesses at home and can afford to send all of my children to school. I am the first person to use a loan for business in my community, and now most of my neighbors have borrowed loans to expand their businesses.”

Borrower Story- Client Bu Phan
       Every morning, Mr. Phan and his wife prepare food for their children before school, and then prepare feed for the pigs living in a small hut close to their house. Raising pigs is a family business that his wife does in addition to her household chores. Aside from their pig raising business, they also have a wedding rental business, renting a wedding hall they own, chairs and tables for ceremonies in their rural area. The popularity of this business has attracted many customers to rent their facility. Mr. Phan borrowed his first loan of $500 from HKL to expand the business, and a subsequent one of $500 to help purchase an old automobile to deliver the chairs and tables to the wedding hall. His last loan of $1,600 was used to buy popular decorations to upgrade his business to meet customer demands.
       Because weddings are a seasonal industry restricted to the dry season, Mr. Phan and his family also farm a small plot of land behind their house to generate additional income during the rainy season. He also rents out the car to farmers during the harvest season to transport crops.  Mr. Phan is not only a good citizen in the village, but also a reliable client and punctual borrower of HKL. He has never missed a repayment date. He appreciates HKL’s service and the loans HKL has offered him. “Because of HKL’s loans, I have been able to expand my business and generate more income to purchase books, stationary and a bicycle for my children to go to school 5 kilometers away from my house.”

Cambodia, Microfinance Institution: ACLEDA

       ACLEDA was established in January 1993 as a microfinance institution for micro and small enterprises’ development and credit. Following its transformation into a licensed specialized bank in October 2000, it was named ACLEDA Bank Ltd. and upgraded into a full commercial bank in December 2003, renamed ACLEDA Bank Plc. 
       Today, ACLEDA is Cambodia’s leading provider of microcredit, accounting for 39% of the domestic market share in this segment, and is Cambodia’s third largest bank, accounting for about 16% of the systems’ assets.  It continues to focus on bringing credit to rural and small businesses, in addition to providing a range of financial services, including cash management and trade finance. 
       As of June 2008, ACLEDA had over 175,000 loan clients and a micro and small and medium enterprises (SME) loan portfolio of around $138 million.  ACLEDA operates in all provinces within Cambodia with a nationwide network of 214 offices and over 5000 staff. Over the past 15 years, it has disbursed over $1.5 billion of micro and SME loans and helped over 1.88 million people improve their living conditions, achieve success in their businesses and educate their children.  About 60% of ACLEDA’s clients are women. 

Borrower Story- Nuon Davann
Nuon Davann, 35, is a farmer of vegetable crops, which includes Chinese broccoli. Chinese broccoli is harvested every 75 days. According to different seasons and needs, she and her husband grow many kinds of vegetables to supply the demand. "Previously, my husband and I watered the crop with our hands. After I got consecutive loans from ACLEDA Bank at my district, we are able to purchase a machine for irrigating the crop fields, which affords us more time to grow more crops," she said.  “The loans improve my business and family life significantly from day to day and from year to year. All of my three children can go to school to learn general knowledge now."

Borrower Story- Chuob Sony
Chuob Sony was a 32-year-old lettuce farmer. The lettuce is harvested in every 45 days. Previously, she and her husband grew lettuce for their own living and lived in a small and old wooden house.  Since becoming a client of ACLEDA, they have been able grow their farming business and improve their house. Not only do they grow other vegetables now, they launched two new businesses – selling coffee and Khmer noodles—and are living in a stronger house. Sony said, "The loans from ACLEDA Bank allowed us to expand our business, build a stronger home and send our three children to school.  We are very grateful.”