Project Everest

Work Update

[Work Update]: SoCon Cambodia - Empathizing Findings (Bank) - July 2018

This week in Cambodia SoCon we focused on empathizing with banks and microfinance institutions in the Siem Reap region. The purpose of the empathizing activities was to identify and pick up on key indicators to identify our target market. The way we wanted to approach this was through a series of questions that we posed to the many bank managers, loan officers, etc that we spoke to. For example, we thought that finding the type of customers that were most likely to want access to funds, but were also the most likely to be rejected for a loan would be the “gap” in the market that we could potentially fill.


Although we were hoping that these institutions would give us more information on customer demographics, we quickly realised that, this was a big ask. However, we learned other valuable pieces of information.


Important things we learnt:

  1. Low default rate in Siem Reap

  2. Most financial institutions require collateral in the form of land or property - can’t be movable objects.

  3. Most microfinances offer their interest rate around the 18% p.a mark, which is also the interest cap in the country.

  4. They use simple interest to calculate interest.

  5. Most of loan applicants are women (cultural reasons

  6. Loans offered in KHR and USD

  7. Loan processing for small loans is 3days to 1 week

  8. There is usually a loan officer to go back and assess collateral

  9. 2 ways to assess credit risk: They use data from the Credit Bureau of Cambodia to make Credit Assessments. Otherwise, they use advice from the Credit Community (run and comprised by the members of the community)

  10. Maximum number of active loans per person is 2 loans (set by NBC). They found that people who had more active loans, were more likely to default on their payment.

  11. Most of the duration of the loan is relatively short 4 years. However, most people pay them off within 1-2 years.

  12. Increasing number of customers are using 3rd party money transfer services to make their loan repayments.

  13. Most repayments are monthly repayments. After consolidating such information, we worked on identifying various market segments that could be our potential target market. A few such segments are (street vendors, farmers, under 18 year olds, people without adequate land titles as collateral to apply for loans, people who find the current interest level rates as unfavourable.)




There are 100+ MFI’s in Cambodia, and 22 big players in Siem Reap alone, there might be a possibility that the market is saturated, however at the same time people are still in poverty. Despite the widely available options, it doesn’t appear that everybody is availing these services. Thoughts on this puzzling scenario are most welcome and wanted.

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

William Lee Jul 12, 2018

Very insightful. What were people using these loans for/What kind of things were they using the money to buy?

Is there a view to conduct any experiment to start validating parts of the BMC? e.g. exploring the effectiveness of different 3rd party money transfer systems as a streamlined and cost-efficient money distribution/collection system?

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Sruthi Sodum Jul 18, 2018

The main reason people look to loans is to buy land or build a house.

We've been looking into Wing Money - it's an electronic money transfer/payment service.

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Alexander Teicher Jul 17, 2018

Fiji guys could maybe benefit from looking at how the Credit Community works and if any of the MFI's assess risk with more unconventional methods?

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Justin Hakeem Sep 2, 2018

Status label added: Work Update

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