Phun Them

Thank you for your loan. It has been disbursed to Phun Them by MAXIMA Mikroheranhvatho Co., Ltd. in Cambodia. We are excited to watch this business grow. Over the next 12 months, MAXIMA Mikroheranhvatho Co., Ltd. will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

Usually when I visit Maxima clients to talk to them about their Kiva-funded loans, it involves me, a Maxima credit officer, a small motorbike we share to make the trip out to the field, and a mild element of surprise as visits to clients are unannounced. However, my visit to Phun Them in late November was no ordinary visit.

I went to Phun's house as part of a group of five, in a convoy of three motorbikes. With me were two Maxima employees -- a credit officer and a management representative -- and a two-person film crew sent by Kiva B4B, an affinity program run by the credit card firm Advanta in partnership with Kiva.

This was no surprise visit. The film crew was on a mission to document connections between Kiva-funded borrowers and Kiva lenders, and planned to interview Phun and at least one Kiva lender who had helped fund her loan. Phun graciously agreed to participate.

When we arrived, Phun welcomed us all into the space under her modest house with a big smile. The size of our group attracted attention, and it was though Phun had found instant celebrity. Neighbors crowded in to watch the interview, but Phun remained unflappable. She was remarkably relaxed as we sat down to interview her about her loan and business.

Phun employs her sister and a niece to weave and still weaves herself, though she says she's "not so quick" at the loom. They work seven days a week, from 7 a.m. to 11 a.m. and 1 p.m. to 5 p.m. each day. Phun's story might be much the same as those of thousands of other weavers clustered in semi-rural areas around Phnom Penh, but it's not.

Phun is not just a weaver, but a silk fabric trader as well. In becoming a trader of finished fabric three years ago, Phun cut the middleman out the picture (or more accurately, became her own middleman) and guaranteed herself more of the profits from the sale of the her fabric. She said it was the money from her loans from Maxima that allowed her to become a silk trader.

While her decision was smart business sense no matter how you look at it, it appears almost prescient considering the circumstances faced by weavers recently. As raw silk prices have gone up, the price for finished silk fabric has fallen, hammering what were already-thin profit margins. Phun said that by selling her own fabric directly at market she's been able to increase her net profit by 10 to 20 percent, affording her some relief from the squeeze facing most weavers.

Weavers are holding out hope, however. With inflation has tapering off the price of raw materials has stabilized, and the time of year when silk fabric is in highest demand has arrived -- December and January are high season for weddings, and Khmer New Year celebrations are in April -- so perhaps prices for silk fabric will rebound soon.

This loan for $500 is Phun's third loan from Maxima. It was funded by Kiva lenders, as was her second loan from Maxima. Phun paid off the remaining balance of her second loan early so she could more quickly secure a new loan and access to a lump sum of cash to reinvest in her business. She said she used the money from this loan to buy raw silk for her three-loom weaving operation and to buy finished woven silk fabric from other weavers in the area for resale at market in nearby Phnom Penh.

Phun said that once she's paid off this loan she wants to take out another one for $600 to buy a new loom to expand her weaving enterprise. Given her track record, this shouldn't be a problem at all. A four-loom operation for Phun is in short order.

Pictured in the photo that accompanies this journal update: Phun sitting on a daybed at her house, being interviewed by the Kiva B4B film crew. (When the video of Phun is available from Kiva B4B, I'll post a link to it in another update to this loan)

About Maxima:

Maxima Mikroheranhvatho Co. Ltd. was founded in March 2000 by a group of friends with the objective of providing financial services to low income clients through small loans to individuals, groups and small to medium-sized enterprises (SMEs).

Maxima aims to contribute to the economic and social progress of rural Cambodia by making credit available to those who lack access to loans from traditional commercial banks. Maxima has been a Kiva partner since May 2007, and since then Kiva lenders have helped Maxima fund more than 1000 loans.

To see if Maxima has loans in need of funding by Kiva lenders, click here. Or consider joining the Maxima fan club -- aka the Maxima lending team -- on Kiva!

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