Finally, the following day we met with a Frenchman, Gregoire Héaulme, an active member of the “Entrepreneurs of the World” network and the person who created the MFI Cahmroeun before handing over its management to a Cambodian.

Phnom Penh, Cambodia: Grégoire Héaulme of the MFI “Chamroeun”

Chamroeun is unique in Cambodia in operating exclusively in urban areas.
According to Mr. Héaulme, the supply of microfinance in rural areas is sufficiently well developed and there are a number of operators who do good work.
However, in cities, MFIs tend to target small and medium-sized businesses and not individual entrepreneurs. These very poor people, who create informal business activities simply in order to survive, had no access to the traditional financial system. As part of its social mission to “provide services to those most in need,” Chamroeun wanted to address this microfinance gap.

Currently, it provides two types of loans:
- Loans for less than $300 that are repaid over 6 months at an interest rate of 4% 
- Loans ranging from 300 to $1,000 that are repaid over 1 year at an interest rate of 3%

In order not to be tempted to favour the second category of loans, which are more profitable and that Mr Héaulme himself describes as “cash cow” loans, Chamroeun has imposed a safeguard: fewer than 20% of loans are for amounts greater than $300.

The MFI also offers two other, more targeted types of loans:
- Emergency loans of $125 designed to be used in the event of an illness, or a fire, etc.
- Loans reserved for individuals who are not the owners of their homes and who are de facto excluded from access to microfinance, as home ownership is the only acceptable guarantee for microcredit in Cambodia

Chamroeun has opted to outsource its microinsurance service because it is an extremely technical product: “Knowing how to select the range of services to be covered, knowing how to determine the correct amount of the premiums, knowing how to negotiate all the necessary administrative aspects with health centres … this is an enormous undertaking, and we didn’t have time to do all that,” explains Mr. Héaulme.
A health insurance program developed by GRET already existed in Cambodia, and it made more sense to work in partnership with this NGO and to distribute their product rather than to create a new one.
Above all, the Cambodian government does not allow MFIs to offer microinsurance.

The difficulties encountered by Mr. Héaulme are related to human resources and the constraints imposed by a slow and corrupt government.

For years, MFIs were deemed to be NGOs in the eyes of the administration. Today, the government seeks to support large operators and to kill off small initiatives in the early stages, in order to lower interest rates through economies of scale. While there are severe criticisms of this approach, it does demonstrate that the government is attempting to use microfinance to raise the living standards of the poorest Cambodians.

According to Mr. Héaulme, training is indispensable: “We’re dealing with people who start off with limited access to education during their youth, and who continue to have limited access to information throughout their lives. Having access to a loan of one hundred dollars is a good thing, but the knowledge to optimise the use of this loan is not sold as part of the package. The training programs are a partial response to this problem.”

Regarding social performance, Chamroeun uses a tool developed by CERISE, a French research group that created the “Social Performance Indicators”. This is a questionnaire that includes hundreds of questions to be posed to the MFI on a variety of topics – including services, human resources and social responsibility – and results in an indicative grade. Chamroeun uses this tool once a year, with the participation of 65 employees of the MFI, to locate and identify areas for improvement in terms of social performance.
Chamroeun has also developed a tool for measuring poverty: a questionnaire is administered to customers when they take out their first loan, and thereafter is given to the same customer once a year. This results in a poverty ranking on a scale from 0 to 100 (0 being extreme poverty), together with statistical information on a number of indicators such as demographics, access to education, health, nutrition, and so on. This tool has existed for 2 years, and reflects the stated objective of Chamroeun and of the Entrepreneurs of the World: “Helping the poorest people.”
The results have been positive.
65% of customers for whom historical data exists have improved their poverty ranking by 10 points; 22% have remained the same; and 13% of have lost points.

To conclude, echoing Paul Luchtenberg of AMK: “We must constantly remind ourselves of our social mission. Making a profit is fine, but if we put our social mission to one side, we could very quickly find ourselves in the business of making money off of the backs of the poor. The consequences could be catastrophic.”
 What about you? What do you think about microcredit?