by James Han, KF9 Cambodia (AMK)

We typically measure the impact of microfinance through financial measures.  What interest rates are the microfinance institutions (MFIs) charging? Has the client’s business experienced increased profits?  Has a population increased its household income?  These are all valid questions and are at the center of measuring the effectiveness of microfinance.

But, I was recently inspired by the broader social impact that microfinance can have.  While the “social bottom line” may not be as quantifiable as interest rates or household income, MFIs such as AMK are proving that an MFI with a strong social mission can have a truly profound impact on a local community.

AMK is Cambodia’s fifth largest MFI and more importantly, one of Cambodia’s most socially focused MFIs.  Back in June 2009 with the help of Katie Davis (KF7), AMK started SIGU (Special Interest Group Unit), an internal team that focuses on assisting “vulnerable groups” that are currently under-served by microfinance services.  These vulnerable groups include women who are victims of human trafficking, domestic violence, and other gender-based traumas, as well as people living with HIV/AIDS, street children, and the disabled.  Last Thursday was a special day for Katie and the SIGU team as they disbursed their first loan to a group of young women who will use the loan to start a sewing cooperative in Phnom Penh.

I had a chance to interview Katie to further dig into how AMK is using microfinance to combat issues such as human trafficking.

What is your position and how did you end up at AMK?

I am the Special Interest Group Unit Coordinator and ended up at AMK because of my Kiva Fellowship, which I completed earlier this year.  After my 4-month placement, I wanted to get a deeper understanding of microfinance and also contribute something unique to the industry.  AMK had already started the research for SIGU and the opportunity naturally came up for me to lead this initiative so I decided to stay with AMK.

Last Thursday was a big day for you, can you tell us more about it?

We recently partnered with a small sewing co-operative comprised of 5 young women who previously worked under exploitative conditions.  These young women had all come to Phnom Penh from rural provinces to escape vulnerable family situations which put them at risk of being trafficked. The women attended a vocational training program that taught them how to sew. The tailor who had employed these girls was very indebted, so she stopped paying the girls’ salaries.  Because the tailor had housed the girls, they had nowhere to go and consequently worked in this exploitative situation for over a year.  They finally broke free when a sympathetic client realized the injustice of the situation and facilitated a way out. Last Thursday, AMK/SIGU extended each woman a loan of $145 to buy a sewing machine.  The 5 girls will work for the co-operative and receive a salary, but if they ever want to leave to start their own businesses, they have their own sewing machine to do so.

The loan disbursement was a special day for me.  I had been to inspiring loan disbursements before through my Kiva Fellowship but to see the smiles on the girls’ faces, knowing the adversity they had been through was an amazing thing.  My experience at AMK has come full circle in that SIGU has been able to designate this first loan as a Kiva loan because these 5 brave ladies want their story told.

The First SIGU Borrowers

Why are these “vulnerable group” underserved in the microfinance community?

There are different vulnerable groups, for example people with HIV/AIDS, people who have become handicapped due to land mines, and human trafficking victims; and in Cambodia they all seem to fall through the cracks of microfinance.  Due to some element of past trauma, they are perceived as a “too risky” poor.  Moreover, NGOs usually become the default supporters for these individuals, and if dependency results, individuals are less exposed to microfinance as a viable economic option for self sufficiency.

What else is SIGU working on?

A big part of my job is to be an ambassador for AMK and microfinance to the NGO community.  The NGOs that assist vulnerable groups are great at implementing after-care programs and supporting victims emotionally but we also recognize they need to be supported financially.  I don’t believe NGOs in Cambodia should spread themselves thin by trying to create a credit program from scratch, just as we as a bank should not try to develop after-care programs in a field where we have no expertise. Collaboration which draws on the core strengths of both MFIs and NGO, in the form of a partnership, can help ensure that clients are supported both emotionally and economically.

We currently have formal partnerships with two well known after-care organizations in Phnom Penh, Hagar International and Daughters of Cambodia.  Hagar operates as a residential shelter and community outreach program.  SIGU is designing a microfinance-specific financial education curriculum which will be incorporated into Hagar’s existing vocational programs as a credit pilot gets underway.  Daughters of Cambodia operates as a day center in an area of brothels, offering programs and activities designed to empower victims of sexual exploitation through a range of social, psychological, and alternative employment opportunities.  Clients receive a salary once they acquire new skills and begin contributing to the many social businesses run out of the Daughters center.  Some of the women who have worked at the center for a prolonged period have expressed a desire to start their own business.  So, we have recently conducted trainings for the women interested in obtaining a loan, and we expect to make at least one loan to a Daughter’s client this month.

SIGU will continue reach out to additional NGO’s in the anti-trafficking arena and open the door for further partnerships.  Also, the financial education is something unique to the market in Cambodia and is crucial to the mission of SIGU.  We want the financial literacy training to precede credit discussions.SIGU loans are similar to AMK’s regular loans, but they do differ in collateral requirements. AMK does not expect to profit on SIGU loans, but  we do believe in the capacity of these people to repay, and we believe that these “socially focused” loans can be self sustaining.

Katie

After thanking Katie for her time and for her inspiring work, I began to see a theme in Katie’s work.

She is facilitating cooperation and collaboration between the NGO community and the MF community to alleviate all facets of poverty.  Poverty is being in a state of lack rather than abundance and this can be the case not just from an economical sense, but from an emotional one as well.  With reportedly over 1,000 NGOs in Cambodia addressing needs in education, healthcare, and various human rights issues, there are significant and noble efforts being done to restore “the emotional wealth” of the marginalized.  At the same time, Cambodia’s 18 licensed MFIs have reached close to a million borrowers to provide economic opportunity.  Although both movements have made significant strides individually, only with collaboration will all facets of poverty be alleviated in Cambodia.  And thanks to the efforts of people like Katie, that is becoming a reality.

James Han is a Kiva Fellow working for Angkor Mikroheranhvatho Kampuchea (AMK) in Cambodia.

AMK’s mission is to help large numbers of the poor in Cambodia improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services.  To view their current fundraising loan, click here.

by James Han, KF9 Cambodia (AMK)

AMK's new home office in Phnom Penh

Sus-Dai (Hello)! My name is James Han and I recently took a 3-month leave of absence from my management consulting career to work in Cambodia with Angkor Mikroheranhvatho Kampuchea (AMK), currently Kiva’s largest field partner.  I’m thrilled to see first-hand how AMK operates as they are one of the most well-respected and efficiently operated MFIs in SE Asia (more to come on that topic in future blogs).  I also have some big shoes to fill as past Kiva Fellows from AMK have either been hired full-time by AMK to start new initiatives (again, more to come later) or have now become famous in the Kiva world (e.g. Kieran Ball who created the Kiva video, “A Fistful of Dollars – The Story of a Kiva.org Loan”).  No pressure!

My work plan over the next 10 weeks will be slightly different from the typical Kiva Fellow work plan  I have been out in the Kompong Chhnang province of Cambodia for the past week, meeting with the local entrepreneurs and conducting Kiva Journal updates.  I’ll continue to do this for the next 2-3 weeks and then spend the majority of my remaining time working on a couple special projects for AMK.  Before my placement began, I was sent a list of two dozen projects I could potentially work on, ranging from researching the use of mobile phones in microfinance to new product development for special interest groups, such as victims of human trafficking.  While it was hard to choose, I decided to stay in my consulting sweet-spot and will help AMK revise their incentive and salary compensation programs and will also devise a measurement system so AMK can compare performance between their various branches.  I feel like a kid in a candy shop and will certainly do as much as I can with my limited time here!  Be on the lookout for updates!

I’ll leave you with my first observations about life in Cambodia:

One, everybody in Cambodia smiles a lot!  It’s one of my favorite things about living here so far.  When I was out in the field, a borrower who was part of a group loan found out she had to cover the loan of another group member who ran away from the village.  She was livid and started yelling at me and the loan officer.  It was the tensest moment I had yet, but when I gave her this guilty, helpless smirk, she gave me the warmest, biggest smile as she rode away in her bicycle.  Cambodians never fail to show their pearly whites!

Two, AMK loan officers may have the most difficult job at the MFI.  Being in consulting, I’m used to long days, but back at home, I get to sit in an air conditioned office and order nice take-out dinners.  While I was out in the field this past week, I visited about 5-10 entrepreneurs from 8am to 1pm and couldn’t find the energy to get back out in the field in my moto.  I was exhausted, hungry, and had a horrific farmers tan.  The loan officers on the other hand went for another 4 hours during the hottest time of the day.  And they never complained.  They’re rockstars and they make this whole system work.

Three, Phnom Penh is a city run by NGOs.  I’m impressed by the number of foreigners that make a living helping Cambodians.  The good side of the story is that there is a lot of international pressure on the government to address social issues such as poverty, education, and human trafficking.  However, I couldn’t help but feel like the NGOs are substituting the government in providing social services.  If that’s true, the work that the NGOs do, while commendable, will never be sustainable. I have heard that many NGOs are starting to leave Cambodia because of the lack of funding during the recession.  We’ll see the impact of that reduction soon.  Also, what’s going to happen to the tourist/foreigner dependent economy here when NGOs leave in bunches?

Four, the kids here are extremely smart and talented.  A little girl (10-years old) who goes by “Ka” sells books on the street outside my apartment and is one of the best salespersons I have ever met!    I told her I would buy some postcards from her if I ran into her 5 times.  She proceeded to giggle and hide behind a tree while poking her head out repeatedly, “2. 3. 4. 5! Okay, you buy now!”  Another girl (13-years old) engaged me in a conversation about how it doesn’t make sense public officials have so much money when the rest of Cambodia is poor.  I hope Cambodia finds a way to positively tap into the potential of their youth. (50% of Cambodia’s 14 million people are under 25, with a median age of 20.6)

Five, my favorite part of the day is riding through the Phnom Penh rush hour on the back of a moto.  You get to hear and see the country in fast forward.

Some pictures and snapshots:

Morning view of the Mekong River from my apartment

Kirirom National Park

Repayment meeting in the Phsar Village of the Kompong Chhnang Province

Loan officers from the Kompong Chhnang Branch getting ready for a full day of repayment visits

Picture-perfect drive through the Kor Village

I am excited to be here and will be sharing thoughts, observations, and experiences over the next 10 weeks!

James Han is a Kiva Fellow working for Angkor Mikroheranhvatho Kampuchea (AMK) in Cambodia.

AMK’s mission is to help large numbers of the poor in Cambodia improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services.  To view their current fundraising loans on Kiva, click here.

By design, Microfinance is not sustainable without the dedication of hundreds of thousands of Credit Officers (CO’s) working for Microfinance Institutions (MFI’s) around the world. The Kiva online person-to -person (P2P) lending platform only works because CO’s employed by the 95 Kiva Field Partners in 44 countries are out visiting clients, taking pictures and writing business profiles for our website in addition to their regular loan disbursements and repayment collections. My job as a Kiva Fellow at AMK in Cambodia also relies heavily on the CO’s who bring me out to the field so that I can interview Kiva entrepreneurs and create journal updates that get sent to Kiva Lenders around the world.

AMK Credit Officer (CO) ready to ride

A few things to point out:

• Being a CO is extremely hard work. AMK CO’s often drive their motorcycles 100+km a day through extremely hot weather to meet with clients. It is currently monsoon season in Cambodia but CO’s work rain or shine.
• CO’s can be responsible for managing 300+ clients (in some cases as many as 700 in areas that are dominated by village bank group loans) and these clients must be visited on a monthly basis in order for repayments to be collected
• Co’s are highly visible and typically well respected figures in the villages they represent. When I ask entrepreneurs what type of work they hope their children will pursue when they are older, I frequently get an answer along the lines of “I want them to work at a bank like AMK.”
• Microfinance is a cash business and the CO’s are responsible for transporting and accounting for large quantities of currency. Unfortunately this carries with it the risk of being robbed and conversely a potential temptation to commit fraud.

CO's in training observing a loan disbursement

So how does one become a CO? While I was out in the field visiting Kiva entrepreneurs in Kandal Province a few weeks ago I came across a group of AMK CO’s in training as they were observing loan disbursements and repayments. I was able to talk to the training instructor and ask a few of the trainees about the process.

• In order to apply for CO openings at any AMK branch, the candidate must first sit for an exam which tests quantitative abilities such as interest calculation and agriculture specific conversion formulas (most frequently to hectors).
• If the candidate passes the exam, they apply for a position in a training class. CO training lasts 10 days and while the majority of it takes place in a classroom, trainees spend 2 days doing field observations.
• Upon graduating from the course, the new CO’s will shadow a seasoned CO out in the field for several weeks.  A new CO must then build up their own portfolio of clients by visiting villages that AMK does not currently have a presence in.
• The new CO first builds a relationship with the village or commune leader who will give the CO permission to work in their village and help spread the word to the community.
• The CO will then host an information session to explain how to get a loan and what the requirements are, and then they will return to village a week or two later to collect loan applications from the villagers.
• Yet another village visit must take place for the actual loan disbursement to be made. It is sink or swim for many new CO’s in their first few months on the job.
• Some CO’s are fortunate to be able to take over the existing portfolio of clients from a CO who quits or is promoted to Area Manager.

Despite knowing all of this, I gained an even greater appreciation for CO’s last week while attempting to visit Kiva entrepreneurs in Kandal Province. AMK Kiva Coordinator extraordinaire, Sopanith Hay, and I decided that it might be more efficient to try and find some entrepreneurs on our own rather than tagging along with an AMK CO who was collecting repayments from non-Kiva AMK borrowers in the same area. Not the brightest idea we have ever had…

And that is 5 minutes of footage boiled down from our 3 hour mis-adventure.  A slightly humorous (I hope) reminder that the implementation of the “developed world’s” idea of microfinance really rests in the hands of the citizens of the villages, provinces, towns, and cities where microcredit is extended. I am just giving credit where credit is due (pun intended). Cheers to the CO’s!

Katie Davis has been working as a Kiva Fellow (KF7) at AMK in Cambodia for the past 4 months. Katie is wrapping up her role as a fellow and is staying on with AMK on an interim basis to help start an exciting new unit within the bank focused on serving vulnerable groups.

Over the last three months, four Kiva Fellows (Katie, Julie, Jeff and Drew) have been working and living in Phnom Penh, Cambodia. We are so lucky to have spent this time together in such a wonderful place. Alas, our time has come to an end but we have put together a video to share both our time at our individual MFI’s and our time together outside of work.

It is unusual for multiple Kiva Fellows to be located in the same city, but Phnom Penh is a unique place in the development world and the Cambodian Microfinance landscape is highly active – creating a phenomenal opportunity for us to share our experiences and learn from each other as we entrenched ourselves at our respective MFI field partners: HKL, AMK, Credit and MAXIMA.

While this is the end of our time together each of us will be moving on to new and exciting things. Julie will be attending law school in the fall (law school TBD ), Jeff will be begin studying for his MBA at MIT, Katie will be working with Microfinance in Cambodia in a new capacity, and Drew will be going to Kiva’s partner ASKI, in the Philippines.

We would like to thank all of our great coworkers, especially our Kiva Coordinators for all of their hard work and help. Also, a special thanks to all of the Kiva Lenders who make Kiva and all of our great experiences as fellows possible. We feel privileged to have been able to serve as Kiva Fellows in Cambodia and would love to see interest in Kiva and the Kiva Fellows program continue to grow. If you have enjoyed reading Kiva Stories from the Field please help spread the word and share the link with a friend!

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Facebook users – you can now follow Kiva Stories from the Field here!

Rice plants nearly ready for harvest

Sophisticated income statements and balance sheets are the standard tools used by global corporates to demonstrate their year-over-year growth and net change in assets and liabilities. I saw my fair share of SEC sanctioned 10K annual and 10Q quarterly financial reports while working in corporate banking in New York City, but from where I stand now as a Kiva Fellow in my third month in the field, these accounting instruments are of no use to Kiva entrepreneurs in rural Cambodia, many of whom cannot read or write.

When I interview Kiva borrowers in the agriculture sector (which fits the description for the majority of AMK’s clients in Cambodia), I try to get a sense of how their crops are doing and if they are satisfied with the most recent harvest. Some borrowers cultivate rice solely for personal consumption while others grow to sell. When entrepreneurs have multiple businesses (which many of them do), the decision to sell or keep the rice they grow is often a function of the success of their harvest. If a farmer lives near a good irrigation source they can harvest rice twice a year during both the rainy and the dry season, but otherwise rainy season is the only option since rice cultivation is heavily dependent on the weather.

My enthusiastic instructor

Most farmers I speak with can quickly tell me the market price they can get for one kilogram of rice: typically about 800 Riel (20 cents USD). When I ask borrowers how many kilograms of rice they recently harvested, however, I get a variety of answers, and seldom are they numerical. The general response trend is that year over year growth is described in terms of “better or worse.” While visiting Svay Village in the Kandal Province of Cambodia yesterday I encountered the most enduring and perhaps practical explanation yet of how one entrepreneur measures her yearly “profit.” Check out this video to see my rice accounting 101 tutorial:

Can a line drawn semi annually inside a giant bin marking the height of a rice harvest really provide accurate data? For a hardworking family living in the in Svay Village of rural Cambodia the answer is yes, accurate enough. If this seasons harvest exceeds last seasons harvest and last seasons harvest was enough to feed the family, then some of the excess yield can be sold to bring in additional income for the family.

It was a humbling but wonderful afternoon

Katie Davis is currently serving as a Kiva Fellow (KF7) at Angkor Microfinance Kampuchea (AMK) based in Phnom Penh, Cambodia.

For many NGO’s and even corporate offices, “the field” refers to branch offices and client meetings held outside of company headquarters. “Going into the field” is a very commonly used phrase on the Kiva Fellows blog. This broad definition applies to the work of Kiva Fellows as well, but we get to say we are “off to the field” with extra pizazz because, well – we literally go to the fields.

Step into my office...

(You should not be expecting anything profound from this blog post…after all, cuddling piglets is in the title!)

Field Equipment - Don't leave home without:

1. Small Backpack
2. Flip Video Camera
3. Motorcycle Helmet
4. Digital Camera
5. Notebook & Pen
6. Toilet Paper in Ziploc Bag (Might save your life!)
7. Purell
8. Water
9. Sunscreen
10. GPS device

Chaco tan/dirt lines - the Kiva Fellow tattoo

In Cambodia, most houses in “the field” are built on stilts to create a shady space underneath which the families go about their daily activities, often times sharing the space with their cows, pigs, and chickens who are also trying to escape the 100+ heat. Most of my interviews with Kiva entrepreneurs take place on a wooden bench in the “shade.”

Hangin' under the house

It is easy to romanticize “the field.” I’m not going to lie; I feel pretty bad-ass flying through the Cambodian countryside on a motorcycle with my Camelbak full of equipment. I believe strongly in the work that I am doing with Kiva and AMK, and the field is where all the action takes place. After spending 5 straight days in the field this week, however, I can assure there is a flip side to the romanticized version. The heat is excruciating, I sweat more than I thought is humanly possible, I get filthy dirty, riding on the back of a moto for more than 20 minutes on bumpy dirt roads leaves me more saddle sore than any horse could, and the local food, despite being delicious, can send me running for a toilet, if I am lucky enough to find one. “The Field” does not operate on a clock, and microfinance is a very social construct in Cambodia, particularly when it comes to village bank loans. This is my polite way of saying that there is a lot of “down time” in “the field,” so I am learning to check my notions of efficiency at the door each day. “The Field” is an amazing experience and well worth the uncomfortable side effects. Occasionally I see some amusing things and just happen to have a video camera in my hand. Here are a few random out-take clips from the field. Check out the spooning piglets – gotta love it!

One testament to the power of the Fellow’s network, as described in Julie Ross’s excellent post The Importance Of My Fellow Fellows, is the existence of these two videos below. No sooner had Abby Gray (KF6) suggested via a mass email that it would be useful to have A Fistful Of Dollars: The Story Of A Kiva Loan in French so that she can show it to her MFI in Francophone Africa, than offers to translate/edit poured in from around the fellosphere. “Spanish would be great too” lead to a similar rumbling from the Latin American contingent.

Within three days I had both translations, thrice checked over. And a lot of work on my hands. Et voila! Only… ahem…  a-month-and-a-half later, and the videos are finished.

To link directly to Un Puñado de Dólares, use this link: http://www.vimeo.com/3479976

To link directly to Une Poignée de Dollars, use this link: http://www.vimeo.com/3445730

To download either video, go to the Vimeo page (French/Spanish) of the video, scroll down and on the right-hand side below the viewing stats there is a Download section where you can download the Quicktime version (you will need Quicktime player which can be downloaded for free on the Quicktime Download Page for PC or Mac.

A thousand fistfuls of thanks to Abby Gray, Jessica Chervin, Cynthia McMurry, Monica Chavez Arriaza, and Brice Richel.

HELP PLEASE: If anyone knows how best to get these videos seen by the French and Spanish speaking world, please let me know or distribute as you see fit!

Coming soon… A Fistful Of Dollars… in Japanese!!

Kiva Happy Hour in Phnom Penh

I once heard that Kentucky Fried Chicken conducted a market survey on their brand and found that the words “Kentucky”, “Fried”, and “Chicken” each had negative psychological associations. Hence the change to the more deliciously ambiguous “KFC”.

If this is true, then “Kiva Happy Hour” must surely invoke feelings of warmth and joyous goodwill in most people. Take one fuzzy “innovative-slash-fantastic” organisation, add cheap drinks and nice people, and, as we say in England, Bob’s your uncle… good times.

This is precisely what happened in the Foreign Correspondents Club in Phnom Penh on Thursday in the third week of February. Thanks to everyone who came and to Sanjaya Bagopunyasena for doing most of the organising.

A Fine Fellow

Teresa Dunbar (KF5), right, sells Kiva like a pro. Kiva borrower photos show in back.

All profits from the sale of Kiva shirts are being lent on Kiva to borrowers in Cambodia

Hollie the designer with Katie Davis, KF7

Kiva Fellows new and old (I mean old as in KF6, not age ok?)

Sophany and Sophanith of AMK

Talking about microfinance and enjoying it

Limited Edition Kiva T-shirts

Step aside Gucci… microfinance t-shirts are SO this season. Hitting the runways (mainly of airports in West Timor and Phnom Penh) are the brand new limited edition Kiva “Loner/Loaner” t-shirts. Designed by Hollie Harrington of London, and produced in Phnom Penh, Cambodia, these shirts will add a dash of microcredit chic to any outfit.

Are you a loner or a loaner? Or perhaps even a lender?

If you would like one of these t-shirts there are a few left over in the AMK office in Phnom Penh. Otherwise contact me and I can send you the design files so you can get them printed locally. But only if all profits are re-invested on Kiva!

Kiva Fellows struck by lightning

Kiva Fellows Ball, Briggs, and Dunbar looked Danger squarely in the eye and said “Not today, we’ve got Kiva work to do!” when their plane was struck twice by lightning en route to their new assignments. Thanks to the Flip cameras distributed by Kiva and in true Kiva Fellows tradition this near-death moment was, of course, captured on video. OK so I added sound effects.

Flip video cameras: So simple, even a racoon can use it

Successful applicants for the Kiva Fellows programme generally need to be a bit tech savvy to handle the equipment they will use in the field. But the new Flip video cameras that were issued to KF7 are reputedly simple enough that even monkeys can use them.

Upon hearing this, I reacted as any sensible person would. “Sure, but how about racoons?”.

"How do you paws this thing?"

Note to Kiva: No Flip video cameras were harmed in the making of this video.

Banking conferences in and of themselves are really boring. I attended my share of them as a corporate banking analyst in New York City. Keynote speakers, break-out sessions, networking events, and trade shows all packed into two days of conference center bliss. The Cambodia National Banking Conference held in Phnom Penh February 19-20^th was no exception to this formula, however, it was by far the most exciting and significant BORING banking conference I have ever attended.

My name is Katie Davis and I am a new Kiva Fellow (KF7) working with AMK in Cambodia. At 26 years old I have a few year of business experience behind me, and this seemed like the perfect time in life to step away from the corporate world and do something off the beaten path. I am thrilled to be in Cambodia working in microfinance. I had to chuckle when at the end of my first week at AMK I found myself seated in a huge conference room full of people in black suits, awaiting the start of the first keynote address. This feels so familiar! Given the context, however, there was nothing ordinary about this particular banking conference. Here is why.

Pointing out my name on official attendee roster

The National Bank of Cambodia (NBC) was established as a regulatory organization in 1954 when Cambodia gained independence from French colonial rule. The NBC began printing its own national currency, the Riel, in order to terminate the monetary alliance with the Vietnamese and Laos currencies. The NBC created a few state-owned banks and a series of reforms in the 1960’s and early 1970’s liberalized the banking system and allowed for private banks to operate in Cambodia under the regulation and supervision of the NBC. The Khmer Rouge came into power in 1975 and on April 17^th, the National Bank of Cambodia (NBC) was shut down. Cambodia’s banking system was destroyed and Riel banknotes were no longer used.

In the difficult economic times we face today, government and regulating bodies around the world are becoming increasingly involved in sovereign banking systems on both the private and public entity level. Given this trend, it is almost impossible for me to imagine how a nation would function without a currency and without a central bank during times of distress, but this was the state of affairs in Cambodia during the terrible 4 year reign of Pol Pot and the Khmer Rouge.

The Bank of Cambodia was re-established on October 10^th, 1979 and the rebuilding began, which was no small task considering there was no currency reserve, no document trail, and limited human resources (many intellectuals and businessmen were killed, scattered, or remained in hiding in the years immediately following the nightmare that was the Khmer Rouge). The Cambodian banking system is still in its infancy, but great strides have been made in the last 25 years and the National Bank of Cambodia (NBC) has evolved into a legitimate regulating body once again recognized by the international financial community. There are currently 24 commercial banks, 5 private banks, and more than 26 registered Microfinance Institutions (MFI’s) operating in Cambodia.

Conference Room @ Naga Casino in Phnom Penh

Banking Cambodia: Modernization of the Banking & Microfinance Industry in Cambodia held at the Naga World Hotel in Phnom Penh February 19-20th, 2009 was Cambodia’s first ever national bank conference. It was an honor to attend as a representative of Angkor Mikroheranhvatho Kampuchea (AMK) and the Kiva Fellows Program. Microfinance is thriving in Cambodia and it is exciting to see that the member institutions of the Cambodia Microfinance Association have a seat at the table alongside the commercial and private banks. Microfinance is inherently part of Cambodian’s banking structure due to the large number of Khmer people who receive microcredit loans as opposed to loans from commercial banks.

Since this was only my second week in Cambodia, the conference provided an introduction to key industry players and also gave me some perspective on the overall economic landscape and the four primary drivers of Cambodia’s GDP: the garment industry, agriculture, construction, and tourism. That being said, there were also some drawback to the conference (which ironically was held at a casino) – shameless sales plugs by banking technology companies, and subtle references to the fact many things are negotiable for the right price in Cambodia when it comes to the government and business community trying to attract foreign investment.

I’m not going to lie, I had a difficult time staying alert and awake through all 35 presentations, and from the looks of it so did many of the other conference attendees. Cambodia has finally joined the rest of the world in hosting BORING banking conferences, which is actually quite EXCITING given the turbulent recent history and the role that microfinance has had in rebuilding the economic situation in this nation.

Kiva Fellows attending Banking Cambodia: Drew (KF7), Jeff (KF7), Katie (KF7) Sanjaya (KF5), Teresa (KF5) Not pictured: Julie (KF7), Kieran (KF6), John (KF6)

Like the windshield on a motor-taxi in Phnom Penh rush hour, transparency is vital to Kiva’s survival. To give interest-free loans, lenders deserve to know that every cent of their money is being distributed exactly as promised, whilst borrowers have the right not to be misrepresented.

An important aspect of this transparency, and one which Kiva takes very seriously, is the integrity of the data on its website. Allowing inaccurate data is the first step towards encouraging fraud on the site, which would have severe reputational consequences for Kiva.

A key data check is performed between the time the loan is posted by the MFI, and when it goes live on the website ready for funding. At this point every loan is reviewed by one of a team of over three-hundred online volunteers. These language gurus work from all over the world to translate loans posted in foreign languages and edit those posted in English by Kiva’s field partner microfinance institutions.

This is a crucial link in the chain of events, not only because it ensures that Kiva lenders can understand business postings and thus make informed choices, that lenders are represented with dignity and clarity, but also because it is the one time that every single loan is scrutinized. Editors can, and often do, flag issues ranging from missing information in the loan description, double-postings, loan amount discrepancies, inconsistencies or problems with the borrower picture, to potentially controversial loans, such as a loan for a cockfighting business.

The Editing and Translation volunteers range from a high school microfinance club, to returned Peace Corps volunteers who want to continue contributing to the country where they were stationed, to young mothers home with their children who want to reach out to make a difference, to retired English teachers and technical writers. They are located on six continents around the world.

In my last blog I posted a video which followed a loan from London to Cambodia (A Fistful Of Dollars: The Story Of A Kiva Loan). The client that featured in the video was the smiley and exceptionally accommodating Van Makara, whose loan was posted by field partner AMK and selected by Danielle Lieu and my other ex-colleagues in London to be the recipient of their $25.

When the loan was posted to the Kiva website by Sophanith at AMK, it landed in the work-queue of Lorne Warwick, a retired high school english teacher. He immediately got to work checking the loan posting and editing the English to make it easily comprehensible (perhaps he should have edited this introduction too). His edits can be seen below.

Lorne Warwick has edited over six hundred loans in the past four months alone. And while no-one will ever really understand the complex algorithms running within Danielle Lieu’s brain that made her pick Mrs Van Makara for her first Kiva loan, it’s certain that Lorne’s edits did a fantastic job of making the loan posting infinitely more readable (ideal for people who are sifting through Kiva loans in the office when they should really be working).

Lorne Warwick: An Editor and a Gentleman

Lorne, a keen blogger himself, kindly agreed to write about his involvement in Kiva and what goes into the editing process. This is what he wrote:

Entry by Lorne Warwick, Kiva Volunteer Editor

As the editor of the loan to Mrs. Van Makara, the subject of the excellent video, “A Fistful of Dollars: The Story of a Kiva.org Loan,” I have been asked to write briefly about my involvement with Kiva and what goes into the editing process.

A retired high school English teacher, my path to Kiva was largely serendipitous. In my first year of retirement, I purposely avoided making any commitments that would impose specific structure on my day, since structure was something that had defined my professional existence for 30 years. Content to take each day as it came, I busied myself with small home-improvement activities (never quite finding time for that major renovation needed in our basement!), an education research subcontract, and some sporadic writing.

My second year found me with a desire for a little more structure, so I began volunteering at a local food bank sorting and shelving donations. The very immediate results wrought by strictly physical effort were and still are quite gratifying. However, as time went on, I began to want to be of more service to others, never forgetting how fortunate I was to have been able to retire while still in my fifties, healthy and financially secure. The thought of paid work held no appeal. After becoming a lender with Kiva, one day I noticed a button on the site that said “Do More,” and to my delight found that the organization was seeking editors. The rest, as they say, is history, and I have now been editing loan descriptions for the past year, usually assigned two sets (with an average of 12-15 per set) each week by Kristy Harrison, one of Kiva’s volunteer coordinators living in England.

Perhaps the most powerful inducement for me in editing loan descriptions stems from my work as a teacher. I always had a special respect and admiration for those students who came to me, not to complain about their mark or try to wheedle a few extra points out of the old man, but rather were genuinely motivated to try to better their academic results. Essentially, they said, “I want to improve my work, and I want you to help me to reach that goal.”

Expressing such a desire meant I was at their service, and, in partnership, as long as they maintained that attitude and commitment, progress invariably ensued – progress not sudden and spectacular, but instead slow and steady. At the end of term, students would sometimes thank me for my help, but I would tell them that they had done all of the hard work – I had merely provided a framework and structure for their efforts.

This is precisely how I feel about Kiva, its mission, and my small role within the organization. The people seeking loans, already vetted and assessed by local Kiva financial partners, are the ones who bring the commitment, the motivation, and the goals to the deal – we are merely the conduit by which those goals can be achieved. Like the students I worked with for so many years, they have my deep respect and admiration, and I am happy to be of service to them.

Which brings me to the other aspect of Kiva that I find so immensely appealing: its model does much to renew the human spirit. I am convinced that the desire to help others exists in most of us, but this spirit of philanthropy needs regular cultivation. For example, many people have specific charities to which they regularly donate, and are quick to respond to pleas for money when natural and human disasters happen. However, these contributions are often made to large and seemingly faceless organizations tasked with dispersing the funds in a responsible and ethical manner. Our involvement in assisting the lives is thereby quite limited. The Kiva model, however, invites on-going participation in the lives of the borrowers, first as we select the region, the entrepreneurial activity and the borrower, and later as we can track the success of the loan through its repayment. The entire process is a steady reminder that we, as individuals, can indeed have a positive effect on the lives of our fellow human beings.

Kiva is an organization powered by a vision that is ideal for the times in which we live. While the events of the world and the actions of our leaders may frequently invite despair, Kiva is a vital reminder of the good that still exists, indeed thrives, in the heart of humanity. I feel privileged to be a small part of its efforts.

_____________________________________________________

Postscript

To view two more examples of loan edits, go to the following links

Zinllahbodin’s loan revisions

Cecilia Andoh loan revisions

And to see a short video of live editing as it happens, check out the Cecilia Andoh loan live editing video

_____________________________________________________

If you or anyone you know would be interested in becoming part of the Volunteer Editing and Translation Team at Kiva, visit http://www.kiva.org/about/opportunities/ and follow the appropriate links.

I’ve lost count of the number of times I’ve explained the concept behind Kiva to family, friends, and people I’ve met along the way, but each time my explanation is slightly different.

This is because Kiva is really quite difficult to explain. It incorporates frightfully odd concepts such as microfinance, acronyms such as MFIs, faux acronyms (“what does K.I.V.A. stand for anyhow?”), frequently confused verbs “lend” and “borrow”, crossovers between banking and charity, international flows of money, interest and yet no interest, is it a tech start-up or is it a non-profit? It’s both Jim, but not as we know it.

I used to start with the basics: “Kiva is a website…”. But then I thought that makes it sound a bit, dare I say it, cheap, like hamsterdance.com is a website, so then I switched to “Kiva is a web-based non-profit organisation” which is the signal to most people to stop listening immediately and start planning an escape route to the bathroom.

I like to tailor the explanation depending on who the person is, how interested they seem, whether they know terminology such as microfinance or even the internet – in some Cambodian villages knowledge of the former outweighs knowledge of the latter whilst back home in England the opposite is true.

But when it comes down to it, does anyone really understand the Kiva process from start to finish? Well sure they do! But will we ever meet these mysterious people? Probably not.

So before I left my job at Credit Suisse in London, I decided it would be great to try and follow one loan through the system from start to finish, for the benefit of my colleagues who I coaxed into making a loan, and for myself, and for anyone else who is interested.

Three months later and my little project has reached fruition and dropped right off the tree in a sticky mess. An eleven minute video that I’ve effectively been married to for twelve weeks. It haunts my dreams. I’ve developed repetitive strain injury in my left arm from sitting at my laptop. 

But I’m thoroughly glad I did it as I’ve discovered a new passion for making and editing videos to add to my long list of hobbies-to-take-up-and-then-drop-months-later. And I’m right-handed anyway.

I hope that you enjoy watching it as much as I enjoyed making it.

Note: To watch the video in full screen (recommended) please click on the four arrows in the bottom right-hand corner of the video

To see all of the AMK loans currently fundraising on Kiva.org please click here

Additional note: To link directly to the video please use the following URL: http://www.vimeo.com/2769845

In Cambodia there is a popular song called Tov Dondung Kon Key by Khemarak Sereymon. The song is VERY catchy and we hear it EVERYWHERE. The best part of the song is the story. It’s about a guy who has this crush on a girl who he meets at the market. When he goes with his mother to meet the girl’s parents so that he can ask them to marry her, the girl’s family asks for $5000 as a dowry. Unfortunately, even if he sold his rice field and cows he would not have enough money, so he sings about his agony.

Here’s a question for you Kiva lenders, if he asked for a loan would you support him?

I used the song to make a video of our recent visit to Takeo Province:

This was my first overnight trip and it was amazing. We went into areas that were much more remote than I had ever been. On our second day, we had to walk a kilometer just to reach the Village Bank meeting. It’s also harvest time so we saw many farmers and farm workers harvesting the rice.

The best moment of the trip was when Kieran asked one of the borrowers what they would do if they couldn’t get a loan from AMK. We then asked the same question to the other clients we met. Many of them said they would turn to private lenders who charged 10-20% interest a month (compared to the 3% a month AMK charges). Cambodia has 18 microfinance institutions, but AMK goes into the most remote areas where other MFIs don’t go because of the costs involved to service these borrowers. For many borrowers, if AMK didn’t go out there they would either turn to loan sharks or they would not borrow the money necessary to improve their lives. AMK chooses to serve these clients because of their mission:

“To help large numbers of poor in Cambodia to improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services”

If you think AMK is doing great things you should definetely check out their loans that are currently fundraising on Kiva. Also if you think AMK is awesome as much as Kieran and I do, you should join the AMK Fan Club!

As many of you Kiva lenders have noticed, Kiva recently upgraded the administration system that Field Partners use to post businesses and report repayments. The partner administration system, aka PA2, is where Field Partners post businesses onto Kiva and report on the status of each loan. This was a major redesign of the site and it has brought a bunch of great new features that benefit both lenders and Field Partners. For those of you who haven’t been reading all of my posts (shame on you!) I am a fellow at AMK and HKL, and I’ve also been working closely with the other two Cambodian MFIs, CREDIT and Maxima, to help them with the transition to PA2. Having been a fellow in a PA1 world and now getting to see PA2 for awhile firsthand, I wanted to give you lenders some perspective of PA2 from the field!

• Now, Field Partners, aka Microfinance Institutions (MFIs), report the exact repayment schedule for each Kiva loan – Previously it was just assumed that loans were on a monthly schedule. In the new system, MFIs can report the exact dates of when a loan payment is expected. This lets MFIs post loans on all types of schedules such as end-of-term, weekly, bi-weekly, etc. If the MFI wanted to set a schedule in which the borrower pays back the loan only on the days when Saturn and Uranus are in alignment, this can now be done on Kiva! Unfortunately, none of the members of the Astrological Microfinance Association have joined Kiva yet…
• MFIs now report the exact status of each loan every month – Every month each MFI uploads a list of the total principal paid for each Kiva loan. This is great for Kiva and Kiva lenders because it can help them get a better sense of what exactly is happening on the ground and identify any loans and/or MFIs that are having a hard time paying back loans. Even though you’re thousands of miles away, you’ll actually know how the borrower is handling the repayment process. If a borrower makes on time payments or an early payment, then you know everything is okay. If a borrower misses a payment, then you know that they might be having problems. The change has been great for MFIs as well. For example, at AMK we do a mix of monthly loans and end-of-term loans. We use to report the status our end-of-term loans manually, but that was a lot of work which took a lot of time. I made a Microsoft Access application for AMK called the Kiva Loan Tracker which can report the exact status of all the Kiva loans onto a CSV file. In PA2 we can just upload that CSV file and our work is all done in just a few minutes! Sweet.
• MFIs Repay Kiva Lenders When the Borrower Makes a Repayment - The MFI repays Kiva when the borrower makes a payment. This helps MFIs because now they do not have to repay Kiva lenders on a different schedule than the loan terms. This is important because it prevents creating liquidity/cash flow issues for MFIs, which is a serious problem for many of the smaller MFIs. This is also great for Kiva lenders because if a loan receives an early payment then the Kiva lender gets repaid early also. This happens quite often at AMK, especially with many of the end-of-term loans. I’ve noticed many AMK loans being repaid months early.
• The Actual Disbursement Date is Posted – In PA1, the MFI would post a disbursement date on Kiva, which was more of an acknowledgment that the loan has been disbursed and that its status will be reported to Kiva. In PA2 the actual date that the loan was disbursed is reported to Kiva. Many MFIs post loans on Kiva that have already been disbursed. They do this because for them it is the only way to incorporate Kiva into their operations. Many MFIs front the money for these loans, hoping that they will get funded on Kiva. At AMK a loan description is written by the client officer when a client applies for a loan and then the picture is taken at the loan disbursement by the Area Manager. This information is then sent to the head office in Phnom Penh by taxi. This prevents AMK staff from having do to an extra visit to the client, which would be a waste of resources. The last thing Kiva wants to do is to be a burden on the MFI, which could inadvertently increase interest rates.
• Google Gears – The Kiva engineers incorporated google gears into PA2. This is EXTREMELY helpful for MFIs, because many of them have VERY unreliable internet connections. When I arrived in Cambodia, the internet at my MFI was down for almost a week. This was a very painful experience if I was posting a business, because if the internet went out in the middle of a business posting, we would have to start all over once the internet came back on. In PA2, if the internet goes out, a draft is stored which you can then return to at a later time. As I’m writing this, the internet just went out and Chan Ry, the HKL Kiva coordinator, was in the middle of posting a business. Now he doesn’t have to start that post from scratch! Hurrah! Google Gears also stores part of PA2 on the computer of the MFI which lets the site load quicker. If you guys can remember the days of dial-up modems, then you’ll know how slowly webpages load at some of the MFIs (that’s if they load…)
• We Can See Your Comments – PA2 has a page where we can see all the comments from lenders. This is helpful because it makes it easier for Field Partners to respond to your comments.
• Separate Server – Occasionally Kiva lenders get really excited and bombard the Kiva website looking for loans that they can lend to. Once in a while, this causes the Kiva webservers to crash. In the past, when this would happen MFIs wouldn’t be able to post new loans. Now PA2 is stored on a separate server, so if Oprah decides to share her love for Kiva on national television again, MFIs can keep on posting.
• Increased Transparency – I’ve been helping all four Cambodian MFIs make the switch to PA2 and I’ve realized that PA2 has created a much greater sense of transparency. The four Cambodian MFIs are not committing any fraud. I can state this for a fact because each MFI gave me access to their data. The more real information Field Partners send Kiva, the easier it will become for Kiva to spot any signs of trouble or fraud. In PA2, Field Partners also report the exact account number for each loan, so when Kiva does an audit of a Field Partner it will be easier to spot any signs of trouble. My Loan Tracker makes sure that information is accurate by taking the exact data from their Management Information System, so when a business is posted the names and account numbers are exactly the same on Kiva as they are in the MIS of the MFI. In the past we had hard times finding information on some Kiva loans, because the names were translated slightly differently.

Some Kiva lenders have been asking Kiva why MFIs cannot send repayments on a weekly basis, so that they could get their repayments quicker. One lender even compared the new system to sports announcers from the 1930s who called away games on the radio using tickertape. The truth is microfinance, at least in Cambodia, works at a pace similar to tickertape. Here at AMK, the central office receives data from the branches at the end of the month. At HKL, the branches send data to the main office every two months. The reason is that these MFIs do not currently have the necessary infrastructure to receive real time data. At HKL the data is put on a CD and sent to the main office by taxi. Real-time Kiva updates would be great but it is not feasible (at least not yet). Kiva and the MFIs are the doing the best they can given the circumstances. Until the network infrastructures of these MFIs is improved (which will hopefully happen in the coming years) there will always be a lag between the date of transaction and when it is reported to the lender. But as the infrastructures of the countries that Field Partners operate in improves, Kiva can start asking for more information quicker.

Because this new system is requiring MFIs to report information quicker than they normally do for Kiva and for their own operations, PA2 could become a burden for some MFIs. The last thing Kiva wants to do is hurt the efficiency of the operations of any of its Field Partners. This is why Kiva gives MFIs a 15-day grace period for when they upload the status of each loan at the end of each month. I’m currently working at two Field Partners, AMK and HKL (I just started at HKL). AMK has a network that allows me to connect to the servers at each of the branches and download the data for each loan. My Loan Tracker works very well there. At HKL they don’t have a network like that. We’re working around that by getting branches and sub-branches to send their data through Windows Messenger. Getting the data from the sub-branches with unstable internet connections has proved rather difficult and for those we may have to rely on receiving the data by CD, which can take weeks. This must be even harder for MFIs where the internet is worse.

PA2 has come a long way in the last few months. I’ve been testing it out since August and PA2 is much more stable now that it was a few months ago. The Kiva engineers should really be commended for their hard work in getting this up and running. Though there are still a few bugs, I’m sure the Kiva exterminators engineers will get rid of them in no time. Also, once MFIs get use to the new posting process many of the errors in the payment schedules will disappear.

If you still need some more info on PA2 you can read all about it here, here, and here.

In my first week at Kiva’s rising-star field partner, AMK Cambodia, I was lucky enough to go on a two-day trip to the Kampong Cham province with the aim of meeting some Kiva clients and taking some photos for the AMK marketing department.

Over the 36 hours I took around 1500 photos – partly because Cambodians are super photogenic, and partly because 95% of my photos look as though Sambo the Phnom Penh elephant took them (he lacks opposable thumbs). With his eyes shut.

I made this short video of a loan being disbursed to the Sreymom Suong Group. They were pleased to become Kiva clients for the first time, even if it did mean having to pose for a photo or two. It’s not quite Tarantino, but it’s certainly in a similar ballpark.

Below are some of my favourite photos from the trip, if you like them you can go to this flickr slideshow to see the rest.

To see more AMK loans that are currently fundraising on Kiva, go here

In my last post, I talked about visiting a client with Phanith, the AMK Kiva coordinator. The client officer (a.k.a. loan officer) was not available to take us, so we relied on a hand written map that got us lost many, many times. We had to ask almost every villager we saw, before we finally got to the client.

Getting lost in a village got my mind thinking about how nice it would be if we had an actual map with the locations of clients and how to get to them. So I spoke to Paul, the CEO of AMK, about how we could give GPS devices to our client officers. This would let us track them as they go to each village bank and client, creating one massive map of Cambodia with the locations of every AMK client. The benefits of such a map include:

• Client officers and other branch staff are often rotated to other branches as a fraud preventive measure. When a staff member arrives at their new branch, they could use the map to help them locate clients, instead of having to rely on other staff members at the new branch.
• Staff from the auditing department could easily locate clients, allowing them to do spot checks on loan amounts and loan payments to help reduce fraud.
• The research department could use the map data to keep better track of clients to further assess AMK’s social impact.
• Organizations that are partnering with AMK to provide highly beneficial services to AMK clients, for example the water filter company IDE, can use the map to find clients instead of having to rely on AMK staff members to direct them.
• Kiva Fellows could use the map to easily find Kiva clients and report back to lenders on their status.

Paul liked the idea and asked me to try it out. I got a GPS device and took it with me on my last village visit with Phanith and Kieran. In case you haven’t already checked it out, Kieran made an awesome video of our journey out there. I also made a video of the trip using Google Earth and the data from the GPS device. We were going to figure out how to sync these two videos together, but instead we made separate videos and set them to the same music

If you think AMK is doing great things you should definetely check out their loans that are currently fundraising on Kiva. Also if you think AMK is awesome as much as Kieran and I do, you should join the AMK Fan Club!

Last Wednesday Phanith, the AMK Kiva coordiantor, and I were very eager to head out into the field the next day to ask two Kiva entrepreneurs, the Siphat Yang Village Bank and the Chon Erm Village Bank Group, questions that I had gathered from lenders. Unfortunately, when we called the loan officer she told us that she got the dates mixed up, and that she had visited those clients the week before for repayments. Phanith and I knew that we couln’t let you Kiva lenders down, so we weren’t going to let this stop us! We decided to try to find the villagers ourselves… easier said then done.

We went to the Kandal branch office the next day. An area manager agreed to show us the entrance to the village on his way to a disbursement at another village. He drew us a little map and dropped us off at the entrance. Phanith and I hopped onto a moto and headed into the village, only to get lost very quickly.

Phanith tries to decipher the map that was drawn by the AMK Area Manager.

We started asking villagers for directions, but most of them had no idea where these clients lived and tehy mistakingly sent us off in the wrong direction. Finally we found a villager who knew these clients, HURRAY! He hopped on our moto and took us straight to them. Unfortunately, he took us down a road that was in horrible shape. Phanith tried to navigate the large puddles, but then we got stuck in one. Our moto started to lean to the left. Our navigator was smart enough to jump off, but Phanith and I were still on the moto. My leg was holding the weight of the moto and the two stranded passengers. After a minute, my leg gave way and down we went into the puddle. My butt went straight into the puddle. We decided to walk the rest of the way and we eventually reached the house of Siphat Yang.

White Pants, Brown Mud

Here are the answers to the questions asked by Kiva lenders:

Mary Larkin asked:

“Where do the business people get the goods in the first place?  Are the goods sent in by mail? Do the business  people have to travel to a larger city to buy the goods?”
Siphat Yang gets her goods from Phnom Penh, the capital of Cambodia, which is about a 45 minute drive on moto from her village. She buys her clothes from Olympic and Chbar Ampil markets.

Yusuke from Japan asked:

“How much does their per day income increase because of loans so far? and why?”

Before Siphat took out a loan she was making about $1.75 a day. Now she makes $2-$2.50. She said that the loan allowed her to buy more clothes to sell. It also allowed her to sells her clothes to factory workers on credit. The workers would then pay her back when they receive their monthly pay.

Yusuke also asked:

“How do they cooperate with each other in the village after getting the loan?”
According to Siphat, whenever a group member cannot make a payment, the other group members must cover the difference. The group member who wasn’t able to make a payment is expected to pay back the other group members when he/she can.

Ms. Siphat Yang and her neighbor check out the Kiva business descriptions of the two loans.

We weren’t able to find Mrs. Chon Erm, so instead we posed our questions to Ms. Taing Im Sum who is another member of Mrs. Chon Erm’s group.

Dan Landrum asked:

“Is it at all a hardship to pay back or does the benefit of the loan truly make for increased profits, so it is easy to make the payments as the plantation grows?”
Ms. Taing Im Sum and Mr. Som Yang, another villager who is a farmer, agreed that the loan terms offered by AMK are very reasonable. They pay 2.8% interest monthly, which according to them is the lowest interest rate available. Mr. Som Yang stated that if AMK didn’t offer loans at interest rates this low, then they would not be able to borrow any money. He also joked that he wouldn’t mind if the interest rate was even lower.

Dan also asked:

“Would it be useful for Mrs. Chon Erm’s group to receive some exchange or training in the various aspects of their business, farming, marketing, etc.?”
According to Mr. Som Yang, an organization called IPM has come to his village to train farmers. They showed the farmers new fertilizer techniques and to limit the amount of chemicals used as fertilizers and pesticides. Before he received the training from IPM, he was able to grow one ton of food per hectare. Now he is able to grow four tons on his hectare of land.
Finally Dan asked:

“Is there anything else we might do to help them prosper?”
I didn’t ask this question to the villagers directly, but I told Ms. Taing Im Sum and the other villagers who gathered around about Kiva. I explained that thanks to Kiva, AMK is able to keep interest rates low. (In the picture below you can see them checking out their Kiva business description and photo). So Dan, one of the best things you can do is to keep loaning on Kiva and supporting other organizations that are not only do good, but also to make a sustainable change.

Ms. Taing Im Sum looks for herself in the photo of her group loan. (She's in the second row, third from the right)

Despite all the difficulty in getting out into the field, this was a lot of fun. I hope you guys enjoyed reading this! For those of you who were wondering, I have washed those pants three times with all types of detergents and bleach, but the stain is still there. Any suggestions?

To see a list of all the AMK loans that are currently fundraising on Kiva, click here.

If there aren’t any AMK loans on Kiva, you should check out the AMK Fan Club instead!!

EDIT: I forgot to mention that I had the pleasure of meeting Yusuke a few weeks ago. Yusuke was in Cambodia to promote Kiva in Japan through the Kiva Japan Project.

Well now is your chance!!!

I will be visiting the Siphat Yang Village Bank and the Chon Erm Village Bank Group this Thursday. If you want me to ask the members of the village bank a question, send me an email with your question: sanjaya.punyasena AT fellows.kiva.org

This is the first time I’m trying this, so I might run into some problems. I want to apologize in advance if I am unable to ask your question.
If you could send me your questions before October 15th, that would be great!

Also, if you haven’t voted for Kiva on the American Express Members Project, do so now!!! You only have 10 hours left and Kiva needs 400 more votes to reach second place!!

I hope you guys enjoyed the interview. To see a list of all the AMK loans that are currently fundraising on Kiva, click here.

If there aren’t any AMK loans on Kiva, you should check out the AMK Fan Club instead!

In Cambodia, AMK has the lowest average loan balance per borrower. According to MIXMarket, AMK’s average balance at the end of 2007 was $86 per borrower. To put that in perspective the second lowest was AMRET at $164, which is nearly 90% higher. HKL, Credit MFI, and Maxima (the other three Cambodian MFIs working with Kiva) have an average loan balance of $603, $564, and $514 respectively. Currently, 93.4% of AMK’s loans are below $300 and their average loan balance is now $114. AMK chooses to keep their average loan balance low. They limit individual loans to $500 and they limit the amount an individual can take out as part of a group loan to $150. The reason they do this is because of their mission statement:

“To help large numbers of poor in Cambodia to improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services”

In my last blog post I mentioned how most MFIs were trying to increase their average loan balances to improve their efficiency. AMK, on the other hand, has created a business model that relies more on lending to as many clients as they can. This allows them to use their capital to reach the poorest villagers in Cambodia. The data shows that this business model is working. In 2007, their loan portfolio started at $5 million dollars and grew to over $10 million. From this they made a net income of $823,222 and their return on assets was 9%, which is beyond incredible considering the average loan size. Also, I should mention that AMK is currently owned by Concern Worldwide and Concern Worldwide UK. They have returned all of the profits to AMK as retained earnings,  so all the money earned by AMK is reinvested back into the business.

Road in Toek Noem Village

AMK, just like every financial institution in the world right now, is having a hard time getting additional capital because of the credit crunch. Because of this, they are hoping to raise the percentage of their loan portfolio that comes from Kiva. Right now it is about 2.6%. For awhile AMK had limited the number of group loans they were posting because it was too difficult to keep track of them so they could report payments to Kiva. Group loans are usually a mix of monthly-installment loans, end-of-term loans, and credit line loans, so each group loan would have to have payments manually reported after each clients payments were tracked. This was a shame because the group loans are AMK’s best way of reaching the poorest villagers in Cambodia. Group loans can now easily be tracked with the new loan tracker I created for AMK, so they are now going to increase the number of group loans they post on Kiva. You can find them by looking at the loans with the smallest loan size per entrepreneur that are currently fundraising on Kiva.

If you really love what AMK is doing in Cambodia you should join the AMK Fan Club, a Kiva Lending Group which is part of the new Kiva that is about to be rolled out very soon. If you can’t wait leave your e-mail address as a comment and I’ll invite you to the group!