M. Thanaletchumy is cleaning her small stall outside a block of low-cost apartments where she lives, when two hungry customers come by.

They want idly, or steamed rice cakes, but everything is sold out. It’s late morning in Selayang, Kuala Lumpur, and the 50-year-old single mother has made RM90 from selling roti canai and other snacks.

Happy with her takings, she can go home, finish her chores and spend time with her 14-year-old son — thanks to a small loan from a microcredit- lending scheme. Run by Partners in Enterprise (PIE) Sdn Bhd, the scheme gives small short-term loans to the city’s poor.

PIE is the brainchild of property valuer Edmund Ng, who knows what it is like to be poor. He saw his mother, who worked as a housekeeper, struggle to put food on the table. She was the sole breadwinner for the family of six. "There were times when my mother brought home leftovers meant for the dogs from the houses she cleaned."

The memory of such hardship drove him to channel some profits from his company, KGV-Lambert Smith Hampton Sdn Bhd, to PIE in order to help fight poverty. Ng is the managing director of the property valuation firm. Microcredit schemes, such as PIE, are a lifeline for the poor, who struggle to make a living from hawking and find it difficult to borrow from banks.

Like Thanaletchumy, who has few skills and fewer choices, many turn to loan sharks who charge exorbitant interest rates. Nine months ago, Thanaletchumy was on her feet from 3am to early evening, preparing and selling rice and other dishes for office workers. A large chunk of whatever she made went to repaying a loan shark, leaving her with little to show for the gruelling work. Such loans carry annual interest rates of up to 100 per cent. Thanaletchumy was paying interest of about 25 per cent a quarter, or RM275 on a RM1,000 loan over 100 days.

With PIE, it was different. Thanaletchumy borrowed RM1,900 to buy an umbrella stand, a stove, a griddle and other utensils. "I’m thinking of taking a second loan of RM1,500, to expand my business," she said.

PIE lends up to RM5,000 for up to 26 weeks, interest-free. However, it encourages borrowers to add at least five per cent on their repayments, which goes towards their savings. Thanaletchumy chose to repay RM100 a week. After 26 weeks, she has repaid her RM1,900 loan and saved RM700.

Borrowers collect their savings from PIE once they have fully repaid their loans. "I used the savings to redeem some jewellery I had pawned some time ago for money."

This article was first published on New Strait Times Online and is republished here with permission.