Phal An

Thank you for your loan. It has been disbursed to Phal An by MAXIMA Mikroheranhvatho Co., Ltd. in Cambodia. We are excited to watch this business grow. Over the next 20 months, MAXIMA Mikroheranhvatho Co., Ltd. will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

Phal An has been making rice wine for four years in her village, Damnak Sankae. All of her siblings do as well. During the Pol Pot regime, her family went to Thailand to stay at a UN camp and while there, her younger brothers learned how to make rice wine. When they returned to Cambodia, they taught her the trade.

Her customers include local middlemen who sell her wine to small pubs in the countryside. She has 10 middlemen in her village who rely on her production. Often, she can’t produce enough to meet the demand of all 10, so she borrowed money through Kiva to buy more rice in bulk. She also used the funds to purchase rice wine from her brothers. They have only one middleman in their region, so she buys their surplus and resells it to her middlemen.

When making rice wine, Phal An spends 6 days and 4 hours to complete each batch. The longest step is the preparation: for 6 days a mixture of rice, water and a chemical called Tam Bae soak in a bucket. Then, the combination is transferred to a boiler- the first main piece of equipment. The tin boiler is sealed air tight, with only two exits (one serving as a chimney through the roof of the house, and the other as a pipe to transfer the liquid as it evaporates). A fire is lit with hay underneath the tin container, and rice husks are shoveled inside to fuel the fire. For two hours, the mixture must boil. As it evaporates, the steam travels through the pipe to the second piece of equipment- a clay storage container- where it condenses. (The rice is thus left in the tin boiler, and the wine is transferred to the clay container.) This process takes an additional two hours. Tubing attachments let the wine drain from the large container into smaller jars, and from one evaporation cycle 60 L will be produced. In one day, she can make up to 90 liters of rice wine.

Although she makes 135,000 riel/day ($33.75) from her rice wine sales, this money only covers the costs of production. Her family income is generated as a result of using a byproduct of the wine (the enhanced rice) as pig feed. Once the rice and wine separate, the leftover rice is combined with factory-produced pig feed. The combination helps pigs grow faster to yield a better market price. It takes four months to raise pigs, so she sells them three times per year at 12,000 riel ($3) per kilo. Usually, she can sell between seven and eight pigs to earn $1,680-$2,160 every four months. After covering the $50 start-up cost per pig, the family business makes roughly $400 per month.

Her husband and her son both help run her business. She says their biggest challenge is maintaining a profit relative to the increasing costs. The price of rice keeps increasing and the middlemen’s purchasing price for wine isn’t rising at a comparable rate. The other difficulty she faces is that occasionally, her pigs will die before she is able to sell them. As this is where her family income is generated, the health of the pigs is critical to the family’s livelihood.

Phal An was very grateful for her loan and the impact it has had on her business. Before the loan, she had to buy and transport rice every other day. Now, buying in bulk, she gets a better price and has cut transactions back to one purchase per month. She now has the capacity for increased production and is able to meet her customers’ demand. Her production since the loan has tripled from 30L/day to 90L/day. Using the new sales, she’s purchasing more rice to maintain the higher production level. She now makes more pig feed than she can use, and has generated a side business of selling the excess feed to her neighbors.

Phal An is pictured with her son in front of their rice wine production center.

Dear Lender,

Happy Year of the Ox! Thank you for supporting a Kiva entrepreneur in Cambodia.

It is the first day back in the Maxima office after Khmer New Year, and the office is abuzz with discussions of people describing their vacations. Our Kiva Coordinator, Sophal, a bright, 22-year-old Khmer girl and one of my closest friends in the office, asks me where I went.

“Battambong,” I reply, trying to pronounce the name correctly. After a few feeble attempts, Sophal at last can understand the city I mean.

“Did you dance, Julie?” She asks.

“Yes! We danced at the pagoda all three nights!” I exclaim.

“S’bai, at? Was it happy?”

“S’bai s’bai! Very happy!”

My name is Julie Picquet, and I am a Kiva Fellow working with Maxima Mikroheranhvatho, a Kiva Field Partner based in Phnom Penh, Cambodia. With two-thirds of my fellowship complete, I can hardly believe that I have less than one month left with this beautiful country and its inspiring citizens.

Kiva’s Partnership with Maxima

As a Kiva Fellow, I was placed with one of Kiva’s Field Partners to provide support and transparency into the money lending process. In the past nine weeks, I have visited Kiva entrepreneurs and worked closely with Maxima staff to write borrower updates, streamline our upload processes, and help with translation. As you may know, all entrepreneurs on Kiva’s web site are supported by local Field Partners, or microfinance institutions (MFIs) like Maxima, who are Kiva’s liaison between Kiva lenders and Kiva borrowers. They choose which of their clients are eligible to receive Kiva support, write and upload business profiles, disburse loans, collect payments, write journal updates, and respond to lender comments. Currently, Maxima is the only Field Partner to be completely owned and operated by Cambodians.

Despite the prominence of microfinance institutions in Cambodia (more than eighteen major banks and counting), Maxima stands apart from the rest as a boutique firm. As the smallest of Kiva’s four field partners in Cambodia, Maxima has the flexibility to tailor its loan products to best fit client demands. For example, some loan products include flexible interest rates, allowing clients to choose a lower interest rate if they can come to the Maxima office to make their payments, rather than have the loan officer drive to the clients’ residences. This cuts down on significant costs for the MFI, who can in turn pass the savings on to the client.

Riding on the back of a Maxima motorbike, interviewing borrowers and hearing about their business operations, I am impressed by the enthusiasm villages show when a loan officer and I drive past their houses. Sothea, a loan officer whose territory is the Koh Dach Island on the Mekong river, where she was raised and her parents still live, teaches me about customer service. “I always smile, the whole time I’m here,” she says, “My clients are everywhere, I want them to see me happy!”

Client Profile: The Um Family’s Mushrooms

Maxima’s clients seem happy, indeed. In the past nine years, Maxima has disbursed over $6 million dollars of loans and reached over 10,000 families. Maxima gives not only business loans, but also loans to build houses or to send children to school. In the homes I visit, I see the signs of development – children’s homework on the bamboo bed, taxi driving certificates pinned to the wall of a humble, wooden house. Piece by piece, Maxima’s loans help Cambodians improve their standard of living through sustainable business growth.

One example of this forward movement through small business entrepreneurship is exemplified through Sotheany Um and her family. When a credit offer and I approached the Um household, Sotheany’s father proudly told me that he could speak some French (which he learned when Cambodia was a French colony), so I said “Je m'appelle Julie.” He laughed and pulled up some chairs for Sothea and I to sit, while his daughter finished some work. During our interview, Sotheany’s young daughter ran around in pigtails and holding a balloon while we talked.

Sotheany is a hardworking businesswoman. This is her first microfinance loan, and she used all $700 of her loan to start up a mushroom business near the home she shares with her parents. She learned the mushroom growing trade from her brother-in-law, who had learned it from his uncle. She started the business about 6 months ago upon receiving the loan.

In this business, large, dark rooms are filled with vertical lines of segmented plastic bags, each filled with a mushroom fertilizer. The bags hang from floor-to-ceiling, and after a few weeks, wide, white mushrooms begin to sprout from the bottoms of each segment. The Ums built two buildings to grow mushrooms, each with over 5000 segmented bags. Sotheany’s father and brother-in-law enthusiastically showed us their mushroom huts and the mushrooms that are beginning to grow.

Sotheany sells her mushrooms on the island for 6000/kg for regular consumers, and 4000 or 5000/kg for wholesalers. One problem she faces is the lack of wholesalers to purchase her mushrooms. She may need to sell some of her mushrooms in Phnom Penh as well in order to increase her market. Sotheany is hopeful that she will be able to pay back her loan on time.

This video shows my interview with Sotheany, as well as her father and brother-in-law giving us a tour of the rooms where her mushrooms grow: http://www.youtube.com/watch?v=LoHT7jC5tUw

I was deeply impressed with the hard work that the Um household had put into starting this business. Mr. Um had even painted signs to mark the entrance of the mushroom hut, in both Khmer and French. To me, it showed the care that they have taken to run their business successfully and increase their income. On the Koh Dach Island, most people are weavers, and I imagine that it must take courage and confidence to introduce a new product to the island.

Before leaving to visit more weavers on the island, I thanked the Um family for their time and wished her success: “Some nang lo’ah!” – “Good luck!” To Sotheany’s father I said, “Au revoir!”

Maxima Welcomes the New Year

Last week Maxima brought in monks to bless the staff for Khmer New Year and invited me to join. Upstairs in our office, desks were pushed aside, mats were spread, and shoes were removed. We sat down and listened to the monks chant, as they splashed us with water and showered us with flower petals. The following day at 7:30 am, I was picked up by Maxima’s driver and brought to our Khmer New Year Party, where we met up with our second branch and the 60 or so employees cooked together, ate together and danced together as a family. “S’bai at, Julie?” They ask. “Yes,” I say, “I am very happy. Are you?”

Cambodia’s recent history paints a very different picture than the one I have come to see in my time here. Development is underway, and in the wake of a genocide, social problems and political corruption, in the faces of my coworkers and the people they serve I see happiness and determination.

On behalf of Kiva, Maxima and its hardworking clients, I thank you for your continued support of our hard work. Together, we can bring sustainable solutions to poverty and facilitate development worldwide.

We wish you a happy and healthy Year of the Ox, and we hope to continue to partner with you in the future.

Very Sincerely Yours,

Julie Picquet

Maxima Mikroheranhvatho

Phnom Penh, Cambodia