Cambodia-Loans

While owning a home has been a quintessential aspect of the “American dream,” one can now say it is also part of the Cambodian dream.

As Sriv Keng and her husband begin their day, they get up in the early hours of the morning and manage to get ready in the confides of a small shack they share with nine others in the outskirts of the Cambodian capital Phnom Penh. Sriv sells rice soup meals near the factories and her husband is a clothing vendor. Making only $800 a month between the two of them, enough to live on but not enough to sustain a decent living environment, the dream of owning a home remained simply that, a dream.

Talmage Payne, an American who grew up serving the poor in Nigeria with his parents and again in Cambodia during the deadly Khmer Rouge era, founded First Finance, a bank that gives out 15 year fixed rate mortgages to low-income families in Cambodia seeking to buy a house.

After failed attempts convincing major Cambodian banks to feed money into his project, Payne, along with a few friends, decided to simply start their own bank. With $300,000 of their own money, along with $1 million raised from donors, First Finance bank become truly the first of its kind.

Surprisingly, Payne claims that due to the economics of low-income Cambodian families, they actually make reliable and good customers. Since almost every member in the family from the youngest child to the grandparents work, this makes them “financially resilient.” With a minimal two percent default rate, First Finance has actually managed to make a profit.

While waiting for the approval of their mortgage application, Sriv and her husband were visited by officers from First Finance. It is part of the routine examination of the bank to meet with their potential customers to see what their financial standing is. They ask for detailed information regarding Sriv’s small roadside business to see how much money she spends and makes.

The Keng’s were approved. Their $16,000 loan helped them buy a beautiful two-story house, complete with indoor plumbing for the toilet and kitchen as well as tile floors and open archways. Although they are paying back the loan on an 18 percent interest (about five percent higher than normal banks), they are confident in their ability to pay off the loan, a loan that would never have been possible had it not been for Talmage Payne and his bank. To date, First Finance has given 700 loans to Cambodian families.

– Deena Dulgerian

Source: npr

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Board Member Don Girskis Reports from Cambodia:

On today’s bus ride from Kep to Phnom Penh, we were delayed by a street protest adjacent to the Chinese owned CHC Shoes factory in Cambodia.  Very peacefully, the workers gathered under an awning they set up in the middle of a main road, blocking traffic.  The workers set up massive speakers, and would alternate between dancing to music, and cheering the people who would speak on the microphone.

I was with Tom Gordon, a founder of the Pepper Project (www.pepperproject.org) that resells local Cambodian products that are produced at fair market wages or better, and he decided to exit the bus and get close and personal with the protestors.   He returned to the bus shortly, and I too joined him outside the bus to get a better look at what was going on.  Apparently, the group contained workers protesting their working conditions and their $61 per month wage, which requires 12 hour days and 6 days a week to earn.  The protestors were smiling back at me, at no point was I ever concerned, as the minimum police presence did nothing to alleviate the massive traffic jam, nor did they attempt to break up the protest.

Reading this in the US, it’s easy to think about the Chinese exploiting the Cambodians, the US has no involvement, and the worker’s poor situation in resulting civil unrest.  Yet we too have ownership of this problem.  Upon reviewing the CHC Shoes website, it displays the logos of large US brands including Kohl’s, and Australian brands such as Lowes Shoes.  I have no idea which company this factory produces shoes for, but corporate responsibility must dictate an intricate knowledge of their supply chain, ensuring that fair wages are paid, and that workers are not exploited.  In a country such as Cambodia, where a strongman has ruled for the last 25 years, I can only imagine the conditions these folks have endured for them to risk what they risked by staging a public protest.

Alleviation of poverty can start at home with corporate policies that require complete knowledge of the supply chain.  In my business experience, I have negotiated contracts with some of the largest retailers in the US, and they have put strong language in their contracts regarding treatment of employees at factories, to ensure no workers are exploited in the making of products sold in their stores.  If only all retail stores would require the same commitments and inspections, more factories would improve the conditions for their workforces, helping downsize poverty.

– Don Girskis

Don Girskis is a member of The Borgen Project’s Board of Directors and the former head of Boost Mobile. Girskis had previously been Senior Vice President of World Wide Sales at ShoreTel, a publically traded global telecommunications company. During his four year tenure at ShoreTel, Girskis also served as interim CEO. Prior to ShoreTel, he spent 5 years at Boost Mobile, a wholly owned subsidiary of Nextel Communications. He joined Boost Mobile as Chief Operating Officer when it was just forming. He was promoted to run the entire operation as Senior Vice President and General Manager of Boost Mobile after one year, and developed the business from an idea to $1.8B in revenue in just 5 years.