Project Everest

Work Update

[Work Update]: SoCon Cambodia - Empathising Findings (General Public) - July 2018

Today in Siem Reap we went to the Old Market in the city centre which is a popular tourist destination. People generally sell, souvenirs, tourist clothing, fresh food and produce, dried food, cosmetics, jewellery and art.



Our objective today was to build rapport, understand how people established their businesses, how they acquired funds for setting up a business, whether they had undertaken a loan in the past, and whether or not they would be interested in undertaking one in the future.



The general atmosphere we encountered today was lots of enthusiasm in conversing with us and taking a few minutes to answer our questions. It was good that we went in the morning, unlike previously when we went in the afternoon and people were more reluctant to engage.



A few things we noticed:
1. Many employees working under owners were interested in setting up a business of their own
2. Most sole proprietors were happy with their current situation and had little interest in expansion
3. Rents ranged $500-$1500 USD per month (depending on location/size/type of store).
4. Upfront costs for setting up a store with non-perishable inventory was approximately $5000.
5. Low Season (July), some are usually out of pocket for rent during this time. But they made up during high season
6. Loans:
• Not many were interested in taking out loans from banks
• Some did get acceptance for a loan, but later decided that it was too expensive to go forward with
• The theme that loans were unpopular/too expensive was noticed often.
• People didn’t have collateral for loans, not many owned farms (we expected more members to have farmland in their villages)
• They preferred to borrow money from their parents, because that would mean they could pay them back as they wished (most likely without an interest rate as well).  



To further investigate:
• How to face situations where people’s general disposition towards taking loans was negative? Sometimes due to religious/cultural reasons (Buddhism) being in debt may be discouraged.
• Is there a distrust in financial institutions?  How can we overcome this?
[see link: https://www.phnompenhpost.com/business/nation...s-dodgy-lenders]

edited on 5th September 2018, 23:09 by Justin Hakeem

Rose Martin Jul 10, 2018

Hello, and hope you guys are doing well since we last spoke!

Empathising in town is definitely a good place to start in terms of customer profiling and getting a general vibe of the Cambodian market of small businesses and potentially micro-loan clients. However, I still think it would be interesting for you guys to zone in on one micro-segment as an interesting test-case this month. Have you thought any more about trying to do something like this? And perhaps what type of segment do you think would be your early adopters in Cambodia?

Good luck with everything!
Rose

Reply 2

Ella Grier Jul 20, 2018

I really agree with Rose's point! In Malawi for example, young women with small business are those that engage with finance in both a formal and informal context and it is very easy to see how that demographic would become to early adopters of a business based around financing.

Interestingly, a similar distrust in the formal banking system exists here. We have been told that people will refrain from banking and loans based on the fact that they think the banks will steal from them and so would prefer to use alternative methods or not save at all, giving rise to a 'no saving' culture.
A result of this distrust, as well as other influencing factors, has been the village banking system, which we have observed as being very common in a rural setting.

It has been a very organic way in which Malawians have overcome that distrust and we came upon these through trying to understand why this distrust exists. It might be that a similar quasi-banking system with strong community and social aspects exists in Cambodia as well.
Check out more details on this system if youre interested:
https://projecteverest.crowdicity.com/user/activity/245248

Reply 1

Wade Tink Jul 26, 2018

Hi Sruthi, in this post you touch on the problems that your customer segment faces. Could you edit this post now at the end of the month and go into detail on the problems? This would also warrant a post on customer segment as well.

Reply 1

Wade Tink Jul 26, 2018

Status label added: Work Update

Reply 1

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