Low interest rates enable Vannak to grow his income
Despite hard work and initiative, Vannak always struggled to increase his family’s income. When he borrowed money from local lenders to buy seeds or other inputs for his farm, cripplingly high interest rates meant that most of his earnings went towards repaying his debt.
Since receiving his first loan through VisionFund Cambodia, a licensed microfinance institution established by World Vision, Vannak has made rapid and substantial progress.
He used the loan of around $290 to buy corn and bean seeds. And while his harvest was around the same size as previous years, this time he was able to comfortably repay his loan with cash to spare because the interest rate was low.
“We were so excited because of how we’d benefited from the VisionFund loan and paid off our other debts,” said Vannak’s wife Srey Neang.
As a result, Vannak was able to buy more land and increase his harvest. He then combined his farm income with a second VisionFund loan to buy an electric generator and start a car battery charging business, an idea he carried with him after migrating with his wife to her home district.
In rural Cambodia where there is often no electricity, people use car batteries to power household lights and small appliances. After Vannak spread the word about his new venture, it wasn’t long before the business took off.
With Srey Neang’s help, he now charges about 40 batteries a day and earns between 40-50 cents per battery depending on the level of service provided. “Good customer service is very important because if you finish the job on time, you’ll get more jobs,” Vannak explained.
He’s proud that his business is also benefiting his community. The batteries help to power lights that enable school children to do their homework at night and they also attract crickets, which are a food source for local people.
Vannak said the training he’s received with the loans has been very important because it has “helped me learn how to manage money”. He and Srey Neang now have their sights set on another loan, which they will use to start a grocery business.