IMAGINE…Villagers Self-financing Their Paths out of Poverty. The Power of the Community Loan Fund

What makes Shanta unique in the humanitarian and community development world? Our unique development model has three pillars of sustainability that ensure a permanent (yes, permanent!) solution to poverty:
1) A holistic approach that addresses all of the interlocking and self-reinforcing
dimensions of poverty.
2) A mechanism for villagers to self-finance village development work through the establishment of community banks.
3) A commitment to six-year partnerships that allow us the time to discern, train and deploy local leaders.

The community bank is a powerful engine of development because its low-interest rate makes all farming and business activities more profitable. The accumulated interest is used to grow the community bank and fund development, infrastructure, and education projects. The committee that we train to manage the community bank holds yearly transparency meetings to boost confidence in the partnership by letting all villagers know the details of loan amounts, recipients and interest balances. Equipped with all of the facts, villagers are empowered to decide together how to spend money on development projects.

U Thone, a farmer from a graduate village, Ta Khae, used loans from the community bank to expand his business. He shared his story with our Muditar staff. We are so impressed with his entrepreneurial spirit and commitment to a better life for his children.

“Before the establishment of the community bank, my only income was from selling banana leaves I collected in the forest. After Shanta established the community bank, I borrowed money for four years continuously. I used the loans to upgrade my business and increase my income.

Now, I don’t need to waste my time finding banana leaves in the forest. Instead, I buy banana leaves and dried tea leaves from local farmers and then sell them at the township markets. Through the market, I connected with a land broker, and I used my extra income to buy and sell two pieces of land. Now, I own my house, which is nice. I bought a car and could afford my children’s education through high school.

I don’t need to borrow from the community loan fund anymore, but I am thankful for the benefit that it has brought to my village. My families’ life improved a lot because of the access to loans.”

Notes: Banana leaves can be used for cooking, wrapping, and food-serving, for decorative and symbolic purposes in numerous Buddhist ceremonies, and, in traditional homebuilding, roofs and fences are made with dry banana-leaf thatch.
Before the establishment of Ta Khae villages’ community bank, U Thone borrowed money from brokers with interest rates of 5% to 7% per month.