Endeavors magazine: Small loans, big results

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Small loans, big results

by Neil Caudle

Women go into business to rebuild.

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When the tsunami struck Phi Phi Islands in southern Thailand, Laoa Saguantai’s family lost their home and their livelihood. Her husband’s boats, which he’d used to transport tourists, were heavily damaged.

With no income, no collateral for a conventional loan, and few prospects, Laoa and her husband took advantage of the first promising opportunity that came their way: a community-savings group organized and funded by Kenan Institute Asia (K.I. Asia).

In classes taught by K.I. Asia staff, Laoa learned how to manage money and coordinate the work of the group’s members, most of them women. The organization works something like a small savings and loan association: each member puts a minimum of 100 baht—about $5 U.S.—into savings each month, and the group’s executive committee authorizes small loans to help people start businesses or rebuild old ones. Contributions from K.I. Asia and other organizations have provided a base of working capital ranging from $2,000 to $17,500 U.S. to get the groups started.

Laoa and several other women in the group used their loans to open a souvenir stand where they take turns working. With a loan from the group, Laoa’s husband repaired his boats and went back to work. Today, Laoa has a new house where she lives with fourteen members of her family left homeless by the tsunami.

Julee Waldrop, clinical associate professor in the School of Nursing and the School of Medicine, has been studying community- savings groups in Thailand to learn how they work and what they contribute to tsunami recovery. In February, she interviewed nine women from six groups in southern Thailand. Two of the women had lost their husbands to the tsunami, and all were struggling to help their communities recover from the destruction. Waldrop found that the groups offered something in short supply after the tsunami: hope.

“The women I interviewed have real gratitude for the opportunity that these community-savings groups give them—not just to them personally but to theircommunities,” Waldrop says. In each interview, Waldrop heard stories about small loans making a big difference. A woman from the Krabi area, a single parent who was working in the rubber plantations, used her loan to buy a motorcycle so that she could carry more rubber to the seller instead of walking for miles with the rubber in her arms.

The majority of the women Waldrop interviewed were Muslim, and she was surprised to learn that they claimed considerable control over household finances.

“Even the ones who said they were housewives before the tsunami told me that they were in control of the money and made decisions jointly with their husbands,” Waldrop says. After the tsunami, women ventured into new enterprises, apparently with support from their husbands. “There was such desperation that men and women all worked as hard as they could to make whatever money they could and to start whatever businesses they could to rebuild.”

For the women she interviewed, the infusion of capital from the community-savings groups has sped the rebuilding, Waldrop says, but money is only one side of the story. Education is the other. “Everyone who had been a leader in a community-savings group had been to at least one training session that K.I. Asia sponsored,” Waldrop says. “These are women with very little formal education who were learning new skills that could really change their lives.”

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In the women’s view, the training and consultations they’ve received from K.I. Asia’s staff are giving their fledgling enterprises a chance to succeed in the long term. The women hope that this assistance will continue past the term of the K.I. Asia support, which is scheduled to end next year.

Waldrop plans to return to Thailand soon to learn more about how the groups are affecting local recovery efforts. She has been surprised at how much emphasis the women place on rebuilding their villages and local economies, even when they’ve lost so much personally—their loved ones and their homes.

“I think they are proud to be helping themselves and their communities,” Waldrop says. “That generates community responsibility and community hope.”

The Kenan Institute of Private Enterprise provided funding for this research.

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