About Me

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Phnom Penh, Cambodia
Chou was born in 1979 in a remote area of Takeo province. His childhood had no dream and he grew without clear future objective, but he can reach new height today due to his unwavering effort. “Always explore opportunity for life, do not wait for opportunity to come to you” is his word to share with young Khmer generation. His teenager’s life was the most beautiful and challenging time and brought a lot of sweet memories, particularly friends at Bati high school. He is a Consultant/Microfinance Manager at USAID/HARVEST Program and a former Senior Management Team at one leading Microfinance Institution – namely AMK MFI. Prior to joining AMK, he was a Senior Business Analyst at Emerging Markets Consulting (EMC), a leading regional consulting firm, which actively involved in many consulting projects for the World Bank, UNDP, USAID/DAI, Israeli Embassy, AusAID and few leading MFIs on strategic advisory. He holds BA in Philosophy, BBA in Marketing, MBA in Management and Executive Education Program on Strategic Leadership for Microfinance from Harvard University, Boston, USA.

Thursday, October 1, 2009

Market Overview: Technology for Microfinance - Trends driving the technology

In 1895 Priyayi Bank in the Purwokerto district of the Dutch East Indies became the first outpost of Friedrich Wilhelm Raiffeisen’s credit union cooperative movement in what we now call the developing world, and the predecessor of Bank Rakyat Indonesia (BRI), the world’s oldest and largest microfinance institution (MFI). BRI now has over three million borrowers, a staggering 30 million depositors and total assets of $3.5 billion. And it’s profitable.
This story de-bunks at least five myths about microfinance. It’s not new, it’s not small, it’s not just about loans, it’s not charitable, and it didn’t start in Bangladesh. To be fair on Bangladesh, it does have three of the four largest MFIs, including Grameen Bank, which shared the 2006 Nobel Peace with its founder Muhammad Yunus.

Analysis: Mobile Microfinance - Mobile money for the unbanked

Cheer up. As bankers, or their technological bag- carriers, we may now be social pariahs, fearing the question: ‘So, what do you do?’ But there is a sector of the industry on which we can focus that we would be happy to explain to our dinner party neighbour,or seven-year-old daughter. Microfinance institutions (MFIs) help millions of people get on their feet and build a secure future. Over the next few pages, we look at who is helping them, and how.

Saturday, September 26, 2009

What's next for microfinance? More than money

Pro Mujer, an organization that funds microcredit cooperatives in Latin America, also provides women's health screenings, using a special van retrofitted with medical consultation rooms and staffed by a nurse and doctor. The vans travel into remote parts of southern Peru, combining financial help with preventative health care and education. Women in Peru get health care during meetings of their microcredit group in a program of Pro Mujer, a non-profit supported by Seattle-based Global Partnerships. The van combines mobile banking with health services to rural areas..
It's based on a simple fact that people who are poor tend to get sick, and people who are sick easily become poor, or deeper in debt.
Read more:

What Makes a Business “Social”?

“Service to society, guided by well-articulated values, is not just ‘nice to do’ but an integral part of the business models for companies.” – from SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good by Rosabeth Moss Kanter.

Tuesday, September 8, 2009

The Role of Mobile Operators in Expanding Access to Finance

Mobile phones may have a huge role to play in expanding access to finance. But does the company that operates the mobile network need to actually provide financial services? Or should others offer financial services, with the mobile operator merely providing the underlying wireless connectivity? The fact that mobile phones can be used as transactional devices doesn’t necessarily mean that the mobile operator needs to “own” the financial service. Banks tend to view mobile banking as a way to enhance service to existing customers, while mobile operators are more focused on addressing the mass market and the unbanked (Ivatury and Mas 2008). In the Philippines and Kenya, allowing mobile operators to design, market, and sell their own transactional savings products has opened a path for extending basic financial services to the mass market in a way that traditional banks have not done. For more information, please visit: http://www.cgap.org/gm/document-1.9.34485/Mobileoperators_Brief.pdf

Sunday, September 6, 2009

Muhammad Yunus: Financial Meltdown Is Chance to Build More Inclusive System

Grameen shows poorest of poor can be creditworthy
BANGKOK - The global financial crisis has highlighted a curious success story: A bank that doles out loans to some of the world's poorest, least-creditworthy people continues to have a payback rate of nearly 100 percent. In this Wednesday, Aug. 19, 2009 photo, Nobel Peace laureate and a 2009 recipient of the Presidential Medal of Freedom from U.S. President Barack Obama, Muhammad Yunus, center, chats with friends before a function at the Foreign Correspondents Club, in Bangkok, Thailand. The global financial crisis has highlighted a curious success story: A bank that doles out loans to some of the world's poorest, least creditworthy people continues to have a payback rate of nearly 100 percent. (AP Photo/Apichart Weerawong) Nobel Peace Prize winner Muhammad Yunus, known as the "banker to the poor," quips that the Grameen Bank he founded owes its success to "sub-sub-subprime borrowers" who also own nearly all the bank's equity. When Yunus approached traditional banks over 30 years ago about lending to the poor in Bangladesh to start small businesses, he was told it could not be done. But since 1983, the bank has lent more than $8 billion to nearly 8 million people in Bangladesh who have had a 98 percent repayment rate. About 4 million more have been similarly helped through partner organizations in 38 other countries - with an average repayment rate of 95 percent. Yunus thinks his model could teach big commercial banks some lessons. "We have now shown that the poorest of the poor can be creditworthy," he said in an interview with The Associated Press during a recent trip to Bangkok. "Our loan repayments are as high as ever." Grameen takes on clients who have no collateral, no credit history and no lawyers. The vast majority of them are women. Most take out loans for $200 or less each time. Yunus attributes micro-lending's success to a system of "moral responsibility" that makes approval and repayment of the loan the concern of the community as well as the individual borrower. Here is how it normally works. A group of five prospective borrowers from similar social and economic positions come together to determine an appropriate loan for each. The request then goes before a larger council of borrowers, who are also shareholders in the bank, and finally to the bank for approval. It's not entirely surprising that Grameen and other microfinance institutions have been largely unscathed by the financial turmoil, said Mayumi Ozaki, a microfinance specialist at the Asian Development Bank. They generally support tiny businesses such as retail shops, vegetable growing and craft making that are not affected much by a global trade slowdown. But the success of Grameen is also attributed to building relationships and trust. "Microfinance loan officers visit their poor clients frequently," she said. "They have good knowledge of the creditworthiness of their clients, and the clients as well value the trust and have a good credit discipline."Ozaki says it's hard to draw too many lessons for big commercial banks, whose transactions are usually much larger and more complicated. But the success of microfinance "shows that successful banking operation on whatever scale is about understanding the risk and managing it well and not overreaching," she said. Such overreaching, as well as lax oversight, contributed to the U.S. credit crisis. One big problem in the U.S. was that lenders made risky loans to people with shaky credit under the false assumption that housing prices would keep rising. Those loans were then packaged into securities and sold to investors around the world. When borrowers started defaulting in growing numbers, financial firms were left with huge losses. Scores went out of business. American government regulators, meanwhile, had little power over mortgage brokers and other firms that catered to so-called sub-prime borrowers. Only now are lawmakers talking seriously about stricter regulations for the mortgage industry. Yunus said at Grameen, "We know the limits of our operations and we know how much risk the bank and our clients can take." A focus on consumption, rather than income-generating activities, contributed to the American credit fiasco, he adds. Grameen also has been successful because it's grounded in what he calls "the real economy," rather than "fantasy economy" of ever-climbing asset prices. A loan for a goat, for example, produces tangible benefits that can support a family. "The closer you are to the real economy, the safer you are," he said. Grameen's model has been replicated successfully in more than 100 countries, including the United States. Established in the U.S. since early 2008, Grameen America lends investment capital to people who otherwise would not have access or would have to rely on money from pawnshops and loan sharks. The failure of traditional banks to provide this kind of credit is a "big hole" in the American financial system where millions cannot open bank accounts, according to Yunus. The global financial meltdown "has given us an opportunity to create a financial system that is more inclusive," said Yunus, who was in Bangkok to launch the Yunus Center in partnership with the Asian Institute of Technology, a university, aimed at poverty reduction in the region. Yunus' latest project is advocating what he calls "social business," which combine altruism with business models to bring corporate efficiency and innovation to help the poor. The goal is to solve social issues and not to maximize profits. But unlike charity which has no mechanism to regenerate its funding, the business must recover its full costs and recoup its investment. Joining with multinational companies, Grameen has successfully launched a yogurt business, Grameen Danone, which provides malnourished children with a low-cost source of nutrition. Grameen Veolia has built several water treatment plants that provide clean drinking water to the poorest in Bangladesh, where some groundwater is contaminated by arsenic. BASF Grameen provides cheap treated mosquito nets to help prevent malaria. Despite cynicism about whether such cause-driven projects could be done on a large scale with no profit incentive, Yunus remained optimistic. He has faced plenty of naysayers before. "When things fail, then it's time to ask questions, fix the problems and redesign the system so it works for everyone," he said. "That's the challenge of the day."

Tuesday, September 1, 2009

Approved investment figures from S'pore, Europe multiply

DESPITE an 82 percent decrease in approved investments in the first seven months of this year, as reported by the Post last week, investments by fellow ASEAN member Singapore have risen more than three-fold to US$176.37 million, according to a recently released breakdown of the figures by the Council for the Development of Cambodia (CDC).In terms of Cambodian investment, Singapore has now closed the gap with Thailand, the largest ASEAN investor in the Kingdom. Neighbouring Thailand invested $178 million in the first seven months - more than Singapore by less than $2 million - having registered approved investments that totalled $15.33 million more than the city-state over the same period last year.In the third week of this month, 21 companies from Singapore met with Cambodian officials in Phnom Penh to seek out investment opportunities."I believe that investment in Cambodia will enjoy better development in the future because now many investors are eyeing investment opportunities in the Kingdom," Yun Heng, deputy director of the Evaluation and Incentive Department of the Cambodia Investment Board, said Sunday.The Singaporean companies were mainly planning to target tourism and agriculture, he added.Lawrence Leow, deputy honourary secretary of the Singapore Business federation and chairman and CEO of Crescendas Group, told the Post during a visit to Cambodia on August 20 that his company would invest between $20 million to $30 million in the tourism sector.Also this month, Singapore's HLH Agriculture Cambodia Ltd announced that it had invested $15 million to grow red corn in the Kingdom. According to CDC data, agriculture and tourism remained the most promising sectors for outside investment.Overall, ASEAN raised its investment into Cambodia from $139.61 million in the first seven months of 2008 to $471.23 million for this year up to the end of July.Europe also dramatically increased its investment in the Kingdom, up from just $15.6 million in the first seven months of 2008 to $292.95 million during the same period this year. Having represented just 0.19 percent of Cambodia's total investment last year up to the end of July, in 2009, Europe accounted for 19.95 percent of total investment in the Kingdom up to the end of last month.France increased its investment in Cambodia from just $6.24 million for the whole of last year to $49.68 million in the first seven months of 2009."I believe that investment in Cambodia will enjoy better development in the future," said Yun Heng, referring specifically to ASEAN and European investors, notably Singapore and France.He added that European investors had been especially interested in the tourism sector.However, the figures showed that Cambodia's traditional investors had largely walked away following the onset of the global economic crisis.China, which made up nearly half of all investment in Cambodia in the first seven months of last year, decreased investment a staggering 93.34 percent from $3.89 billion to $258.98 million.Similarly, South Korean investment in Cambodia fell over the same period 91.11 percent from $1.23 billion to $109.25 million.