Work It Out
By Polai Av, KF10 Cambodia
What do you do when your client is delinquent because the business that they have been doing for years is no longer viable? Or their spouse was in a traffic accident and their expenses tripled? Traditionally, MFIs will seize client’s assets or continue to pressure the borrowers, collecting any amount of money they can get. But this doesn’t help the borrowers or the MFI. The MFI might never recover the money, and if they were to, the time and effort of the client officer is costly. The clients are back to where they started, if not worse, than before they received a loan. Kiva’s field partner in Cambodia, Angkor Mikroheranhvatho Kampuchea (AMK), is trying a different approach with their Workout Program.
The Workout Program teaches their delinquent clients a new skill so that they can start another business. Currently, the program is training a group of delinquent clients in Preaek Thom Village in Kandal Province how to sew t-shirts. The t-shirts will be sold on a fair trade website selling products made by Kiva clients, www.ahkun.org. The clients will receive 50% of the profits that will go towards repaying their loans as well as income for their family.
The clients requested a loan from Kiva to purchase their own sewing machines, an electricity line, and additional sewing equipment.
Other products in the pipeline for the Workout Program will be silk purses and notebooks made from banana leaves.
Keep your eye out on www.ahkun.org for these products coming soon!