First Finance, a microfinance institution in Cambodia, has been supported by PIDG for a number of years through its guarantee solution, GuarantCo. With a new payment default guarantee from GuarantCo, First Finance can provide affordable housing finance to c. 1,300 families living on low to middle incomes, predominantly in rural areas, enabling them to buy a home or improve their existing housing.
Mrs Phearom Vann lives in Kampong Speu province with her husband and two daughters. “Before the project, we lived in a small house, it was just 5m by 6m and lacked a proper toilet which made nights difficult. In heavy rain and storms, the house was fragile, and we would worry about our safety. We had been saving for many years to afford something better.”
Phearom met with a First Finance staff member who advised her on the availability of home construction loans – made possible by the GuarantCo transaction – and the family applied for a USD 15,000 loan. An affordable 60-month repayment plan was agreed, and Phearom hired local builders to build a sturdy new house with a hygienic toilet. They also raised the land to prevent future flooding.
Financial insecurity disproportionately affects women in Cambodia. As such, 90 per cent of beneficiaries of the First Finance transaction are expected to be women.
Standing in front of her new home, Phearom says, “The loan has been life-changing. Our new home has not only provided us with a house, but with a more secure and hopeful future.”
GuarantCo’s contingent credit solution aims to cater to this underserved and financially disadvantaged segment of the housing market in Cambodia by increasing access to longer-term mortgage products for the country’s unbanked population.
