I went to visit some microfinance clients this week to interview them. What I found was very interesting.

The first client was a lady runnin a food stall at a local market, something she had been doing for the last 30 years. She borrowed $300 for 6 months. She used the money to buy more food and extend the range of dishes for sale. There are many Lao food stalls like hers in the local markets. They precook the food and place it in metal trays, like salad in a restaurant buffet. She also had deep fried fish and, as expected, sticky rice. The new food has increased her sales by about $10 a day, so it has been a very successful business venture for her. She’s happy to use the microfinance institution because it offers a quick loan approval that gives her fast access to money. Going through the state bank takes many forms and much waiting. Using the money lenders costs more in interest, and they’re much less flexible if you are unable to repay the loan.

The second client was a butcher. He’d borrowed $150 to buy more meat to sell. This allowed him to increase his sales and make more money. He was able to buy a larger variety of meat than just beef, such as buffalo, thanks to the loan. He was happy with the loan but didn’t want to recommend it to his friends because he thinks it’s a really good loan product and wants to keep it to himself. Overcoming this mentality in customers is something the microfinance institution needs to work hard at to amend. Perhaps giving them some kind of monetary incentive to recommend their friends would work.

The third client borrowed $4000. He runs a goat restaurant, and across the street a goat farm. He used the money to, as you might expect, buy some more goats – about a hundred more in total. These goats were used to supply his restaurant, but he also onsold some live goats to other people. He’s happy to get a loan from the microfinance institution because it’s cheaper than the local money lenders and it means he doesn’t have to make daily payments, just one monthly one.

The last client was a mobile food retailer who has a stand by the side of the road. While we were visiting her her elderly relatives were helping to prepare the food she sold. She borrowed $250 to buy some more food, cooking equipment, and pay for her children’s educational expenses. She was very happy with the loan product and service and has already recommended it to several of her friends. She liked the fact that the microfinance institution is more flexible when it comes to late payments when compared to a money lender. She is able to talk to the staff who are understanding to her situation. For example if she is too busy and can’t ride to the branch to make her monthly repayment, the branch staff are happy to come to her to help collect the money.