During our field trip to Laos in September we interviewed Ali, proud owner of a shop in Vientiane and client of Laos’ first registered microfinance provider Ekphatthana Microfinance Institution (EMI). Access to finance under fair conditions has enabled her to expand her product range and helped her build up personal savings. She is also full of confidence about further business development and thinks about venturing into the wholesale market.
Where did you learn how to run a business?
I learned by myself. First, I sold noodles, one bowl for 3,000 kip (US$0.37). But it became difficult as more people started to sell noodles, so that’s why I changed to this shop with a wider range of goods on offer. Our shop is in between two noodle shops, so I switched to selling different food, but you can still get a warm meal in front. I have sold at this location for 30 years now.
Can you describe a typical working day for you?
I sell food. Every day, I go to the market to buy food to cook and sell. On a typical day, I can earn US$50-60. However, most of my profits are reinvested into the shop. I have to spend on many things: electricity, water, school fees for my children. At the end of the day my profit is about US$12.5; I make just enough money to live here with my family.
Do you take loans to grow your business?
Yes, I do. The shop and my product range used to be much smaller, before I found out about EMI’s services for small business owners. I take loans from EMI because I don’t want to take loans from others with very high interest rates.
What do you use as collateral for the loan?
I use my motorcycle certificate as the collateral. Before that I borrowed from money lenders who collect payments daily, but they charge very high interest rates, for a US$125 loan, I have to repay US$190. It was not good for my business. That’s why I decided to take loans from EMI instead. The interest is low, which allowed me to save at the same time as repaying the loan. By saving with them, I have built up US$400 in personal savings.
How long have you been a client for EMI, the microfinance organisation?
A little over two years: I have already borrowed four times, each loan cycle it took six months to repay. The first time I borrowed US$375, the next time it was US$500, and after that US$625. I think I have proven that I am a reliable debtor. And I already have plans to take another loan and use it to expand.
What are your business plans for the future?
I have plans to grow my business. For example, I plan to have more goods to sell, which will allow me to earn more. Maybe I can sell some more traditional candies and cookies, maybe I can expand the shop space. With a little bit more capital I could sell beer or soft drinks as a wholesaler – that’s something I dream about.