Small loan helps family build better life

Despite their hard work, Phin Hen and her husband could not afford to support their two sons. But when they received a microloan through World Vision, the 38-year-old mother was able to build up her business and create positive change for her family.

By Ratana Lay. Photos by Sopheak Kong. Edited by Peter Warski, World Vision U.S.
Published September 21, 2011 at 12:00am PDT

‘I was hopeless sometimes’

Between Phin Hen’s work on the family’s small farm in Cambodia, and her husband’s job as a well-digger, the two couldn’t afford to meet their expenses.

“I used to want to stop my children from studying to help me with farm work,” admits the mother of two. “I did not have money to buy medicine or send my children to [the] hospital when they were sick.

“My children were sick because there was not enough food to eat,” she adds.

Phin Hen also worked as a laborer on other people’s land to earn a little extra. Even this wasn’t enough.

“I was hopeless sometimes,” she says. “I was extremely worried about my children’s future, because I did not have enough money to support them to go to school.”

A loan with the power to transform

But the family’s circumstances began to change when Phin Hen received a small business loan through World Vision.

She used the loan to buy some fertilizer for her plantation, fuel to use for her farm machinery, a piece of land, a cow, a generator, a corn processor, a tire air pump compressor, and many other items that helped create a thriving business.

Phin Hen's son, Ren Phearun, cares for the family cows. Phin Hen bought the first cow with money from her loan, and it gave birth to two calves, one of which she sold.“The cow I bought had two calves. I sold one,” she says. “I bought the corn processor a few months ago, [and] so far, I am able to earn about 2,400,000 riel (about U.S. $600) from it.”

Phin Hen is grateful for the change she’s watched take shape in her family.

“Presently, my family situation is better than before, and we have a motorbike,” she says. “My dreams became true. My children were able to go to school with shoes. My children’s health is better than before. Moreover, we have money at home to use for emergency cases.”

A sustainable solution to poverty

The loan that helped bring such dramatic change to Phin Hen’s family was provided by VisionFund, World Vision’s microfinance subsidiary in Cambodia.

Entrepreneurs living in poverty, like Phin Hen, usually lack the credit history and collateral assets necessary to acquire loans through formal financial institutions. This means they’re often left with no choice but to borrow money from loan sharks, who charge exorbitant interest rates.

Microloans, on the other hand, provide a safe, low-interest option that empowers a small business owner and helps her become financially independent. As her business grows, she can hire additional workers, and when she repays her loan, it’s recycled to help another entrepreneur — meaning that an entire community can benefit.

Phin Hen is one entrepreneur among many in Cambodia who have benefited from microloans through World Vision.As of December 2010, VisionFund Cambodia had served 108,047 clients, with a total loan portfolio of U.S. $30,017,049. The success of the program has led to positive social changes in communities across Cambodia, such as reduction of domestic violence, an increase in women’s rights, and improvement in nutrition and health.

Though Phin Hen is proud of her family’s success, she recognizes the help she’s received. “If it was [not] for VisionFund, I would become a labor worker forever,” she says.

Two ways you can help

Thank God for the sense of increased stability and independence that Phin Hen and her family have found through the loan they received. Pray that many more entrepreneurs like her will have a similar opportunity to escape poverty and build a better future for themselves and their families.

Read more about World Vision's microfinance programs, and make a donation to help provide loans for hardworking entrepreneurs like Phin Hen.