Rice Bank Project

In the rural poorest communities, where the prime occupation of the people is rice production on a small scale, there is a food shortage. The most intensive period of food shortage is from May to October. During this time people are often forced to migrate from their villages to other places, such as Siem Reap town, Phnom Penh or Thailand to work to generate some income for their families. During the food shortage months, most of the villagers resort to borrowing rice from local lenders at very high-interest rates resulting in villagers being trapped in a cycle of debt and poverty.

To 'fight' the food shortage cycle and help the communities reduce their dependency on the local lenders, the concept of the Rice Bank was created. Lotus and its donors have established 22 Rice Banks so far with about 1,300 beneficiaries.

Rice Bank Store being constructed by community

Once a store is built on concrete columns (to protect it from flooding during the rainy seasons and “rats”), a capital of rice is provided, by Lotus and/or its Donors, covering nearly a full year of rice consumption and seeding.

The rice is then available for member families to borrow during the food shortage period at a low-interest rate.

Completed Rice Store

The rice borrowed and the interest (in rice) are paid back in accordance with the rice harvest cycle, i.e., when the families have harvested their rice crop, which helps to alleviate food insecurity.

The amount of rice in the rice store increases year by year due to the interest paid. The interest rate is fixed by each of the Rice Bank committees. The committees are elected by the villagers, including the village elders.

The repaid interest is owned by the Rice Bank members collectively.  The failure rate for the repayment of the rice borrowed and the interest is effectively zero.

Most of the 'Lotus' Rice Banks are now 4-5 years old and are running successfully, and independently.

That being the case, Lotus and READA jointly decided that the committees of the rice banks should receive appropriate training on how to establish small loan schemes within each rice banks.  The capital needed to establish the loan schemes would be created by converting some of the surplus rice generated (from the interest paid) into cash.

This process is now in place and a number of the Rice Banks have already established small loan schemes supporting the communities on a broader scale.

Lotus and READA are proud that most of the Rice Banks are now self-sustainable and do not need any further rice capital to be donated to them by third parties.

The Rice Bank project has been supported with funding from both Lotus and Lotus' Third Party Donors.