VISIONFUND MICROFINANCE INSTITUTION
CONTENTS OVERVIEW 5.
Vision, Mission and Core Values
6.
Corporate Profile
8.
Message from President and CEO,
VisionFund International
10. Message from Board Chairman 12. Message from CEO 14. Board of Directors Profile 18. Senior Management Team Profile
SOCIAL IMPACT 38. Social Performance Highlights 46. Ten days earlier, no one would probably see her ... 48. Corporate Events Highlights 54. Environmental and employment data at a glance 56. VisionFund Supports Girl’s Education in Rural Communities
FINANCIAL REPORT
26. An Institution of International Excellence
60. 61. 62. 63.
28. Client Success Story
64. Report of the Independent Auditors
21. Key Figures 24. Tax Paid Report
30. Our Products 34. Branch Network and Oprerating Areas
Balance Sheet Income Statement Statement of Changes in Equity Statement of Cash Flows
OUR PARTNERS & VISIONFUND INTERNATIONAL OPERATING AREAS 66. Our Partners 68. VisionFund International Network
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
overview AS A LEADING SOCIAL MICROFINANCE INSTITUTION (MFI) IN CAMBODIA, VISIONFUND CAMBODIA IS PART OF THE VISIONFUND NETWORK, ONE OF THE LARGEST CHRISTIAN MICROFINANCE NETWORKS IN THE WORLD. Our work empowers our clients to grow successful businesses, which enable children to grow up with improved health and education. Working in partnership with World Vision, we are committed to long-term change to unlock the potential of future generations. We believe in brighter futures for children where they can experience the love of Christ, building lives free of need and full of promise. We empower families to create income and jobs: Our financial services enable impoverished households to increase their incomes. We train clients to grow successful businesses using their income to support their children and families. We unlock economic potential for communities to thrive: Working together as part of World Vision – a Christian relief, development, and advocacy organization – we enable communities to increase economic activity, access clean water, education and healthcare, benefit from improvements to nutrition, and provide the foundations for local economies to flourish.
VISION Our vision for every child, life in all its fullness; our prayer for every heart, the will to make it so.
MISSION We believe in brighter futures for children Empowering families to create incomes and jobs Unlocking economic potential for communities to thrive VisionFund - Financial Empowerment from World Vision
CORE VALUES We are Christian We are committed to the poor We value people We are stewards We are partners We are responsive
VISIONFUND CAMBODIA ANNUAL REPORT 2016
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corporate profile VISIONFUND EVOLVED FROM A SMALL-CREDIT PROGRAM OF WORLD VISION CAMBODIA IN 1993 TO A SEPARATE INSTITUTION IN 2003 AS AN AFFLIATED MEMBER OF VISIONFUND INTERNATIONAL (VFI). VisionFund was registered with the Ministry of Commerce as a commercial financial services provider in 2003. It received a microfinance license from the National Bank of Cambodia in 2004 and a permanent license in 2007. Recognizing that financial services are not the only tools for economic development and poverty alleviation, VisionFund has forged synergistic partnerships with a variety of socially driven organizations. These networks have enabled greater outreach and social impact, and have helped to drive VisionFund Cambodia’s strategic approach, uniqueness, and competitiveness. Since its inception, VisionFund has been honored with recognition and awards from various international institutions including the Microfinance Information Exchange (MIX), the Consultative Group to Assist the Poor (CGAP), the United National Development Program (UNDP), and rating agencies for our financial, operational social performance. In February 2011, VisionFund obtained a Microfinance Deposit Taking license from the National Bank of Cambodia and has since been able to offer savings products to the public. Currently, VisionFund has 119 district branches covering in 20 provinces, 154 districts, and 1,515 communes. We now serve 257,853 clients mainly in rural communities. VisionFund settled into a new Head Office Building located at #398, Preah Monivong Blvd, Sangkat Boeng Keng Kang1, Khan Chamkarmon, Phnom Penh on September 9, 2016.
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
In 2016, we employed 1,489 highly trained staff with diverse experience and expertise in the financial sector. We maintained a loan portfolio of US$ 144 million and the repayment rate stood above 98% In addition, we have also mobilized US$ 36 million of savings from nearly 71,000 savers. As a leading social Microfinance Institution (MFI), VisionFund has contributed to numerous communities and educational projects in Cambodia with more than 719,000 children positively impacted. The majority of borrowers (88%) are located in rural areas.
To more positively impact the lives of our clients, we have included at no cost, a robust in-patient health and personal accident insurance policy. This was done to protect clients from the risk associated with illness and accident and to catalyze improvements in rural healthcare infrastructure and service provision. We have connected our clients to other financial institutions through “FAST�, a new fund transfer service through the
National Bank of Cambodia that enables customers to receive funds immediately. Through our mobile project, we are developing an App that provides users the ability to transfer money from one account to another instantly. We kicked off the project by enabling our staff and expect to launch it in the market in 2017.
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message from President and CEO, VisionFund International
Despite shocks to the global economy this year, including foreign exchange movement impacting most countries and companies, VisionFund Cambodia has not only seen growth, but is improving its financial performance and importantly, its positive impact on clients and their children. I congratulate all of our staff for their dedication and resilience, and for never taking their eyes off their clients. VisionFund Cambodia ended the financial year with a portfolio of US$ 144 million. It has been able to extend services to even more rural communities, and now serves 239,000 borrowers in Cambodia with approximately 719,000 children being positively impacted. I also want to pause and recognize VisionFund Cambodia for its achievements: 1. Received recognition from the Smart Campaign for meeting a strong standard of client care as Client Protection Certified (CPP). 2. The loan portfolio increased by 14% as a result of strong commitment of staff and management. 3. Saving Clients increased by 37% and deposits increased by 54%
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
Our network of Microfinance Institutions (MFIs) continues to lead the industry in social performance reporting whilst expanding the use of the Progress Out of Poverty Index to gain a clearer picture of effectiveness of the work that we do. The impact that increased family incomes have on children is also being tracked through the use of World Vision’s ‘Child Well-Being Outcomes’.
In 2016, VisionFund International’s network of Microfinance Institutions across the globe worked together in unison to make life better for over 4 million children. Parents are telling us that when their businesses thrive, they can afford to send their children to school, put nutritious meals on the table and take better care of their families’ health. Together, World Vision and VisionFund are changing the face of poverty and helping children experience life in all its fullness. Whilst we see much progress, the job of providing financial access to millions of people in rural areas has challenged us to think differently. We have been developing new digital models to lower costs while still providing personalized services. In addition, our rural footprint requires us to innovate in agricultural lending. Finally, our research into global disaster insurance is industry leading and may someday provide greater protection to smallholder farmers against uncontrolled events. Listening to our clients’ needs and providing products that they value is high on our agenda.
VisionFund aspires to be one of the most trusted and admired microfinance networks in the world. Our ability to integrate with the work of World Vision provides a uniqueness that is unmatched throughout the industry.Thank you for your ongoing support of this vital work and we hope that you will continue to join us in our mission to bring life in all its fullness for children in Cambodia. Sincerely,
MR. SCOTT BROWN President and CEO VisionFund International
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message from BOARD CHAIRMAN
After four years of serving as Board Chair of VisionFund Cambodia, I am continually encouraged by the commitment and resolve of our VisionFund team, led by our very capable CEO, to stay focused on the mission of being a Microfinance Institution (MFI) that is truly pro-poor. This resolve and the commitments and decisions that follow however are not always easy ones. As many MFIs in the industry in Cambodia have started to pursue a more middle class population with larger loan sizes and perhaps higher rates of return per loan. This leaves VisionFund with the great responsibility, but also the opportunity to have significant impact serving the poor, mainly rural, communities across Cambodia. Especially as services from other MFI’s become more focused on urban markets. The past year was one of solid consolidation of services and strengthening of operations, highlighted by the move of the headquarters to the new flagship building in central Phnom Penh. Cambodia continues to be VisionFund International’s number one operation, with the loans and financial services offered having positive impact on 719,000 children. VisionFund’s loan portfolio increased to almost $144 million USD, and reach was extended, now with
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
VISIONFUND, STAYING FOCUSED ON SERVING THE POOR IN CAMBODIA
operations from 119 branches across every province in Cambodia. As of December 2016, VisionFund has more than 239,000 borrowers and 71,000 depositors, with more than 88% of those living in rural communities.
I am confident that VisionFund Cambodia will continually rise to meet the challenges that come as each new year approaches, by diligently managing non-performing loans and by continuing sustainable growth within this competitive market for microfinance. I am confident that VisionFund staff and leadership will remain steadfast to the mission at hand and continue to make VisionFund a blessing for Cambodia poor who strive to break free from the bonds of poverty and provide a better life for their children.
MR. JASON JAMES EVANS Board Chairman,VisionFund Cambodia National Director World Vision International-Cambodia
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message from ceo
2016 was a challenging year for the Cambodian microfinance industry as the effects of climate-change and declining agricultural product prices increased over-indebtedness throughout the country. We responded in ways that reflect our Christian values so as to enhance client well-being amid this difficulty.
All these blessings will come on you and accompany you if you obey the LORD your God Deuteronomy 28:2
Highlights •
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Embedded a robust in-patient health insurance product in all our loans (over $100) at no cost to the client. This product innovation protects clients and their families from otherwise potentially catastrophic healthcare issues, and encourages investment in healthcare related infrastructure and improved healthcare services across rural Cambodia. Despite it being early days for this product, over 75,000 clients are covered and 389 claims have been submitted.
•
Ensured VisionFund processes reflect the highest standards of client care, and in so doing received recognition from the Smart Campaign by becoming Client Protection Principles (CPP) Certified.
•
Remained focused on the rural areas of
VISIONFUND CAMBODIA ANNUAL REPORT 2016
the country (88% of clients), on the highly vulnerable and risky agricultural sector (64% of clients) and on the most vulnerable, women (93% of clients). •
Expanded our national scale footprint 8.1% from 110 to 119 branches reaching even more deeply into remote parts of the country, and increased our portfolio 14% from US$126.3 million to US$143.6 million.
•
Provided 63 Debt Relief loans to clients debt-trapped by money-lenders and able to work their way out of debt if provided a longer term loan at a lower interest rate.
•
Protected client deposits by maintaining a strong balance sheet with the lowest Debt: Equity Ratio (4.3x) and percentage of withdrawable deposits (26%) among our peers (the MDIs).
more technologically sophisticated and strive to meet the highest global standards in everything we do.
•
Emphasis on social lending for client well-being resulted in almost 50% having access to clean water and sanitation.
Acknowledgement
•
330 students received scholarship support from us in the form of uniforms, bicycles, school materials and savings. Another 1,251 have taken educational loans for up to 7 years at subsidized interest rates.
We are grateful to the Lord for continuing to give us the opportunity to grow so remarkably, predominantly through service to rural, agricultural and female clients. We are also grateful for the opportunities the Lord has given to positively impact the lives of our clients and staff. As we enter 2017, we are excited by the prospects for continued growth and service.
Future Plan 2017 will bring further improvements in client service and greater efficiencies enabling lower interest rates. Technology will play an increasingly important role as clients, using our smart phone based platform, will be able to transfer money, pay bills and apply for loans. Field staff, using the VisionFund Productivity Suite on an iPad, will be able to collect and analyze loan application related data, collect loans and open savings acounts wherever is most convenient for our clients. We are pleased that our staff will also be growing in their capabilities and professionalism as we become even
MR. ADRIAN MERRYMAN Chief Executive Officer VisionFund Cambodia
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BOARD OF DIRECTOR
MR. JASON JAMES EVANS
MR. Adrian merryman
BOARD CHAIRMAN, VISIONFUND CAMBODIA NATIONAL DIRECTOR of WORLD VISION international-CAMBODIA
Chief Executive OfficeR VISIONFUND CAMBODIA
Mr. Jason Evans, a dual UK and Swiss, citizen has been a global leader in the development field for 24 years, 16 of which with World Vision. He has lived and worked across NGOs, cultures and continents, in 11 countries in Africa, Europe and now Asia, as National Director for World Vision International-Cambodia. Mr. Jason is known for building thriving youth focused country programs, strong in the areas of development and advocacy work, with the aim to see nations shaped and changed. Jason has significant MFI experience and has sat on board of VFI MFIs in Georgia (Chair form 2003 – 2006), Albania (2006 – 2010) and Kosovo (2010 – 2012).
Adrian joined VisionFund Cambodia in June 2015 from VisionFund Tanzania where he also served as CEO. While at VisionFund Tanzania, the institution grew rapidly, becoming a profitable regulated deposit-taking microfinance bank, and developing an innovative digital banking platform that integrated e-money and iPad based transaction automation. Prior to VisionFund, Adrian served as CEO of the Opportunity International Network. During his tenure, Opportunity International achieved a fourfold growth in clients, transitioned 10 NGOs to regulated deposittaking banks and established MicroEnsure, an industry leader in micro insurance. Before retiring from the business world, Adrian served as CEO of Screen plc, Chief Investment Officer of Interregnum plc, CEO of Temenos Systems S.A., Head of European Investment Banking for CIBC Oppenheimer and as an investment banker for Merrill Lynch & Co. Adrian has also chaired and served on numerous forprofit and non-profit boards. Adrian was conferred an MBA by the Harvard Business School and a BA in Economics and Political Science by Swarthmore College.
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MR. MICHAEL JOHN SPINGLER
Mr. chap vibol
BOARD MEMBER, VISIONFUND CAMBODIA VFI REGIONAL DIRECTOR, ASIA
BOARD MEMBER, operation director of WORLD VISION INTERNATIONAL-CAMBODIA
Mr. Michael Spingler is a microfinance specialist with over 23 years of development experience providing strategic advisory, technical assistance and capacity strengthening services to INGOs, NGOs, MFIs, banks, and/or credit unions in Cambodia, Philippines, Thailand, Indonesia, East Timor, Vietnam, Myanmar, Sri Lanka, India, Mongolia, Egypt, Ghana and Nigeria. His advisory, technical, and training assistance focused on governance, strategic, business and operational planning, operations, human resources, marketing, and financial management and product development and service delivery. He has worked with TPC, a large Cambodian MFI, CRS and Chemonics in senior management, regional and, chief of party roles on technical assistance and capacity building projects. He is currently on the Board of six other VisionFund International MFIs in Southeast Asia.
Mr. Vibol graduated with a Masters Degree in Development Management from the Asian School of Development and Cross Cultural Studies (ASDECS), he also has a certificate IV on humanitarian assistance from Melbourne University and attended the Humanitarian Leadership Program at Deakin University, Australia. Vibol has 26 years of broad experiences in development and about 17 years with World Vision International Cambodia. In his last five years in Operations Director, Vibol has provided leadership, support and coordination to all operations to ensure efficient and effective program implementation in order to meet the WVI-C goals and objectives outlined in the National Strategy and to ensure the integration of all projects and programs with communities and local partners.
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BOARD OF DIRECTOR
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MR. CHEONG CHIN KUAN
MS. FIONA WHYTE
BOARD MEMBER
BOARD MEMBER
Mr. Cheong Chin Kuan, based in Malaysia, has more than three decades of extensive commercial and consumer banking experiences gained through his tenure with two leading commercial banks. In his banking career, he rose to the rank of Country Head, Consumer Banking for a leading foreign bank in Malaysia. He is also instrumental in pioneering and building the community banking (SME) business model for the bank. Since his retirement in 2013, he was re-engaged by a foreign bank as their business advisor for East Malaysia.
Ms. Fiona Whyte, a New Zealand citizen, volunteered through the “Bankers with Vision� program for VisionFund Cambodia. She has 23 years of banking experience in New Zealand, including 12 years in Foreign Exchange Risk Management. Ms. Fiona studied International Business and Management at Massey University in 2007. Ms. Fiona currently works at the Financial Markets Authority in NZ.
VISIONFUND CAMBODIA ANNUAL REPORT 2016
Mr.Liow Yee Kai
MR. CHRIS BRYAN
BOARD MEMBER
BOARD MEMBER
As a regional counsel, Yee Kai’s work covered over 18 countries in and among Asia and Oceania. He is a qualified Lawyer with over fifteen years of experience doing corporate and commercial legal work in Hong Kong, Singapore, New Zealand and Southeast Asia. Starting out as a Solicitor in New Zealand, Yee Kai went on to become the Regional Legal Counsel and Compliance & Risk Management Director for a wide range of companies including Singapore Technologies, Motorola and Schneider Electric. He has also served as an independent director on a number of companies, including listed companies in the US, Singapore and Hong Kong.
Mr. Chris Bryan, a New Zealand citizen, has a Lincoln University degree and an agribusiness background, with experience in rural finance, farm management, corporate and market development, exporting and business planning. His work included senior management roles in the stock and station, meat and deer industries, export marketing and investment businesses. As a member of the NZ Prime Minister’s Advisory Group, for nearly three years, he advised two Prime Ministers on matters related to the primary sector.
Yee Kai grew up in Singapore and graduated from Nanyang Technological University with a Master in Business Administration in Business Law. Prior to that, he obtained his Bachelor of Law from the University of Victoria in Wellington, New Zealand. He has been admitted as a Barrister and Solicitor of the High Court of New Zealand, and was also a member of Singapore Inhouse Counsel Association and a member of Hong Kong In-house Counsel Association. He is fluent in English and Mandarin, and conversant in Cantonese.
Chris is a professional director and sits on the board of several companies and community/charitable organizations in New Zealand and off shore; he is committed to best practice governance.
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senior management team
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Mr. John Wesley Jordan
MS. TOP SOK SAMPHEA
Chief FinancIAL Officer Visionfund cambodia
Chief Operating Officer visionfund cambodia
Wesley Jordan joins VisionFund with over 15 years of extensive financial and operational management experience in banking services, project management, innovation, and economic development. He previously served with VisionFund in Africa, and before joining VisionFund Cambodia was the Finance Director of Pact Global Microfinance Fund in Myanmar. He also held executive positions with banks and microfinance institutions in Serbia, Mozambique and the Congo. He is originally from the United States, where he earned a Bachelor of Arts from the University of North Carolina and a Master’s Degree in International Affairs at Columbia University. Wesley is a Certified Public Accountant licensed in Washington State, and speaks Russian and French.
Samphea has been in her current position since 2008, after joining VisionFund (Cambodia) as finance and administration director in 2002. Prior to joining VisionFund, She served as a senior auditor of Ernst & Young and Price Waterhouse Coopers.
VISIONFUND CAMBODIA ANNUAL REPORT 2016
Born in Phnom Penh, Samphea has more than a decade of experience in finance, accounting, management, business planning and strategies, auditing, administration and communications. She earned her bachelor’s degree and master’s degree in Business Administration from the National University of Management, Cambodia. She also possesses a diploma of Accounting and Administration from Noisy Le Grand College, France.
MR. PREAP PISETH
MR.Va luong Sorin
DIRECTOR OF Operations visionfund cambodia
DIRECTOR of IT visionfund cambodia
Born in Kandal province, Piseth has more than a decade of experience in development, customer services and sponsorship management, leadership and management, and public communication and administration. His career with VisionFund Cambodia began in 2008. He previously served World Vision International - Cambodia and the Secretariat for Public Functions of the Royal Government of Cambodia.
Currently serving as Director of IT for VisionFund Cambodia, Sorin possesses progressive and extensive experiences in IT information system management, detailed analysis and designing of IT systems architectures, enterprise system integration and project management.
Mr. Piseth holds a Master of Business Administration from Norton University, Cambodia. He also holds a Bachelor of Economics in Enterprise Management and an Associate Degree in Professional Law from the Royal University of Law and Economics (RULE), Cambodia.
Prior to joining VisionFund Cambodia, Sorin served as Head of Business Support Systems and Architecture Development with Beeline, an International Telecom. Sorin has also worked as senior IT Consultant and as Senior Program Analyst by exposing himself internationally with Management Information System Division of Satellite, Telecom and ISP Company, Thaicom Ltd in Bangkok, Thailand. Sorin has a Master’s Degree in IT (MScIT) with an International University of KMUTNB in Bangkok, Thailand.
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senior management team
MR. Chhay panha DIRECTOR OF People and Culture visionfund cambodia Panha has been in his current position since January 2016. He began his career with VisionFund Cambodia in late 2004 as a Credit Officer and also served as a Branch Manager. Panha is from Kampong Thom Province, and has a Master of Business Administration from Norton University in 2009. He has attended various local and international training programs related to human resource management, business, and leadership including programs in Tokyo, London, Italy, Singapore, Tanzania (Africa) and Bangkok.
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
KEY FIGURES Number of Active Borrowers
December 2016
December 2015
238,990
270,341
% of Women Borrowers
93%
94%
% of Rural Borrowers
88%
88% 65%
% of Agricultural Borrowers
64%
Number of Regional Offices
20
18
Number of Districts covered
154
144
Total Staff Loan Portfolio Average Portfolio per Borrower Average Portfolio per Client Service Officer Portfolio at Risk > 30 days
1,489
1,420
$143,688,789
$126,332,036
$601
$467
$219,372
$197,703
1.57%
0.59%
$36,076,836
$23,510,011
71,083
51,893
Total Assets
$166,609,027
$145,697,090
Total Equity
$31,240,445
$27,692,656
Return on Equity (ROE)
11.7%
15.7%
Return on Assets (ROA)
2.21%
3.09%
Savings Value Number of Savers
LOANS METHODOLOGIES BY CLIENT NUMBER Individual Lending 29.27%
LOANS METHODOLOGIES BY PORTFOLIO SIZE Group Lending 25.41%
Individual Lending 74.59%
Group Lending 70.73% VISIONFUND CAMBODIA ANNUAL REPORT 2016
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Growth trend LOAN PORTFOLIO DECember 2012 - DECember 2016 (Us$ iN MILLIONS) 150
143.7 126.3
120 90.9
90 60
48.0
61.6
30 0
2012
2013
2014
2015
2016
ACTIVE loans DECember 2012 - DECember 2016 270,341 228,948
238,990
191,974 156,742
2012 22
VISIONFUND CAMBODIA ANNUAL REPORT 2016
2013
2014
2015
2016
NUMBER OF SAVERs DECember 2012 - DECember 2016 60 50 40 30 20 0
71,083 51,893
29,818
454
2012
2,806
2013
2014
2015
2016
SAVINGS VALUE​DECember 2012 - DECember 2015 (Us$ iN MILLIONS)
25 20 15 10 5 0
23.5
36.1
14.7
1.7
2012
4.8
2013
2014
2015
2016
TOTAL ASSETS DECember 2012 - DECember 2016 (Us$ iN MILLIONS) 150
145.7
120
105.9
90 60
166.7
73.1 55.3
30 0
2012
2013
2014
2015
2016 VISIONFUND CAMBODIA ANNUAL REPORT 2016
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TAX PAID REPORT In the interests of fiscal transparency, we are pleased to publish our consolidated tax paid report in the table below:
Units in US$
2012
2013
2014
2015
2016
Total*
Patent tax
$3,990
$4,560
$4,988
$7,210
$18,500
$55,528
Signboard tax
$5,650
$8,145
$11,427
$16,446
$47,391
$127,821
$0
$0
$296,250
$285,188
$324,033
$905,471
$3,278
$3,903
$3,899
$4,179
$4,041
$21,211
$0
$693
$0
$0
$691
$3,175
Prepayment of profit tax
$133,535
$162,161
$215,899
$306,781
$404,178
$1,551,744
Annual profit tax
$495,527
$487,012
$544,511
$807,394
$739,049
$4,067,506
Tax on salary
$157,583
$194,130
$295,756
$427,216
$640,287
$2,120,641
$4,892
$11,413
$36,460
$71,671
$117,103
$243,390
Withholding tax on saving
$0
$57
$820
$3,519
$7,280
$11,677
Withholding tax on rental
$54,445
$58,387
$79,708
$100,295
$158,997
$585,304
Withholding tax on local services
$27,398
$30,680
$64,307
$216,860
$219,099
$636,053
Withholding tax on overseas services
$102,676
$150,900
$151,468
$243,835
$231,987
$1,029,549
Withholding tax on overseas borrowing
$411,776
$483,742
$636,931
$979,668
$1,195,994
$3,708,11.14
$1,400,750
$1,595,783
$2,342,424
$3,501,207
$4,108,630
$16,248,275
$4700229
$6,296,012
$8,638,437 $12,139,644 $16,248,275
NBC fee per branch Transportation tax Value added tax
Withholding tax on deposits
Total paid Accumulated amount* (year to date)
* Total and Accumulated Amount from year 2003.
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An Institution of International Excellence VisionFund has continuously gained recognition as one of VFI’s top performing microfinance institutions within the World Vision Partnership. VISIONFUND INTERNATIONAL has a global network of microfinance institutionS in more than 30 countries.
AWARDS & RECOGNITION Since 2013, VisionFund Cambodia has been granted a number of awards from both local and international rating agencies and independent institutions: • VisionFund Cambodia received the Outstanding Achievement in Social Performance and the Award for Outreach and Inclusion for reaching out to disadvantaged clients from Oikocredit, a leading global investor based in the Netherlands with a regional office in Southeast Asia.
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
• MIX S.T.A.R Award 2013: (Socially Transparent and Responsible) recognition for completing MIX’s social performance desk review process and successfully meeting all 2013 S.T.A.R requirements. • Best Social Performance Award 2015: VisionFund Cambodia was granted the Best Social Performance in Asia Region at Global Leadership Conference in Bangkok, Thailand on March 2015. • The Smart Campaign, a global initiative to incorporate strong client-protection practices into the microfinance industry has publicly recognized VisionFund Cambodia as Client Protection Certified for meeting strong standards of client care in 2016
MICROFINANCE RATING • In 2013, VisionFund was given a 5 Diamond Rating by MIX for information disclosure and best-in-class practices and commitment.
SMART CAMPAIGN CLIENT PROTECTION CERTIFICATION Issue Date:
May 2016 Issued to:
VisionFund Cambodia #20, St. 71, Sangkat Tonle Bassac, Khan Chamkarmon, Phnom Penh, Cambodia P.O. Box 479
This Certifies that VisionFund Cambodia has been evaluated according to the standards of the Client Protection Certification Program and found to take adequate care to implement Client Protection Principles as promoted by the Smart Campaign.
For a complete list of entities that are currently certified against the standards for implementing the Client Protection Principles, see the Smart Campaign Certified Entities Directory at www.smartcampaign.org. The standards can also be found on the website.
Cli
ed
rotection Cert tP ifi en
A
w
Isabelle Barrès Smart Campaign Director
ard
1
6
Alok Misra M-CRIL Chief Executive Officer
0 ed M ay 2
TO REPORT COMPLAINTS REGARDING THE HOLDER OF THIS CERTIFICATE OR MISUSE OF THE SMART CAMPAIGN NAME OR LOGO, PLEASE CONTACT THE SMART CAMPAIGN CERTIFIER AT contact@m-cril.com OR THE SMART CAMPAIGN AT www.smartcampaign.org. UNLESS EARLIER REVOKED BY THE SMART CAMPAIGN OR BY MATERIAL CHANGES THAT AFFECT CERTIFICATION STATUS, THIS CERTIFICATE IS VALID FOR FOUR (4) YEARS WITH A RENEWAL REQUIRES TWO YEARS FROM THE DATE OF ISSUANCE.
VISIONFUND CAMBODIA ANNUAL REPORT 2016
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because of THE LOAN FROM VISIONFUND, I FEEL MORE SECURE ABOUT MY CHILDREN’s EDUCATION
Ms. Rom Sinan, 34 years old, is a farmer and a full-time mother to one daughter and two sons. All her children have been supported as Registered Children by our partner, World Vision InternationalCambodia. Currently, the family lives happily in Ta Oung Village, Bouy Khao Commune, Phnom Srok District, Banteay Meanchey Province. In 2011, facing financial difficulties in supporting their children to go to school and with barely enough foods for the family, Sinan and her husband determined that they needed to borrow money develop their farming business. However, no one was willing to lend them money. One day, they heard about VisionFund and in 2011
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
were able to obtain a US$50 loan. From the first loan cycle, the couple managed to earn roughly US$4 per day from their rice field and save about US$1 daily. After paying off her 1st loan in 2012, Sinan applied for a 2nd loan which was 5 times bigger than the previous one. This time she used the money for purchasing chemical fertilizer and hiring a few people to work on her rice field.
Sincere thanks to VisionFund for making me fearless about my children’s future
Meanwhile, she and her husband obtained a higher paying job. During that time, Sinan could save-up to US$2 daily, which she used to send their children to school. Using her 3rd, 4th, 5th, 6th & 7th loans, Ms. Sinan improved her rice field and supporting her children’s education. Today, the family is able to have nutrious foods at every meal, a hygienic toilet, a television, a motorbike and most important their 3 children are all enrolled in school.
foods. But after I received the loans, our life has completely changed I don’t have to worry about my children’s future and our income has gradually increased.”
Ms. Sinan said “Before getting a loan from VisionFund, I was so sad that I couldn’t support my children with schooling and
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our products
I. loans 1- Small Business Loan Definition: Small Business Loan (SBL) is any loan used for working capital, business assets acquisition, and other businesses inputs or for income generating activities that earn income on a daily, weekly, fortnightly, or monthly basis. e.g. trading, production, services ... etc.
Tables of Loan Size & Loan Term 80,000 - 20,000,000 KHR LOAN SIZE
351 - 5,000 USD 800 - 200,000 THB
LOAN TERM
3 – 30 months
Tables of Loan Size & Loan Term 80,000 - 40,000,000 KHR LOAN SIZE
351 - 20,000 USD 800 - 400,000 THB
LOAN TERM
3 - 48 months
2- Agriculture Loan Definition: Agriculture Loan (AL) is any loan used for inputs, expenditures, or assets of agricultural businesses or IGAs that earn only seasonal income such as crop growing, animal raising, etc.
4- Education Loan Definition: Education Loan (EDL) is a type of social product which is to be provided as financial support to parents or guardians who wants their children to pursue the higher education or to catch the technical skill. It’s also provided to any individual student who is from poor family, has good academic performance, and has strong commitment to attain higher education or technical skills. Tables of Loan Size & Loan Term LOAN SIZE
Tables of Loan Size & Loan Term 80,000 - 40,000,000 KHR LOAN SIZE
LOAN TERM
LOAN TERM
Bachelor Degree: 3 - 84 months Master Degree: 3 – 48 months
800 - 400,000 THB
Vocational Trainings: 3 – 24 months
3 - 48 months
Definition: Non-Business Loan (NBL) is a kind of consumption loan used for purchasing personal or household assets in order to improve the basic living conditions and impact to child wellbeing such as water filters, latrines, solar energy products, bike, motorbike.
VISIONFUND CAMBODIA ANNUAL REPORT 2016
Associate Degree: 3 – 48 months
351 - 20,000 USD
3- NON-BUSINESS LOAN
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100 - 3,000 USD
5- Express Loan Definition: Express Loan (EXL) is developed to ensure prompt response to client’s financial need in their personal life which may be affected by any of the emergency and unexpected events either natural disaster or personal dangers.
Tables of Loan Size & Loan Term 80,000 – 1,400,000 KHR LOAN SIZE
None Business Loan 23.2%
20 – 350 USD 800 – 14,000 THB
LOAN TERM
3 – 6 months
client
6- Social Cooperative Loan Definition: Social Cooperative Loan (SCL) is a type of social loan product for strengthening the capacity of agricultural cooperative entities or similar agriculture associations especially for those who are under support of World Vision Cambodia by providing the source of fund to support their needed working capital and expansion business plan.
Small Business Loan 12%
Agriculture Loan 64.5% Education Loan 0.3%
Tables of Loan Size & Loan Term LOAN SIZE
3,000 – 25,000 USD
LOAN TERM
6 – 36 months
Debt-Relief 0.1%
Education 0.03%
7- Debt-Relief Loan Definition: Debt-Relief Loan (DRL) is a kind of social loan product for helping Cambodian people, who are facing financial difficulties as they have unmanageable debts, specifically who are indebted to informal money lenders/informal financial institutions, to refinance their debts by paying off existing debts with a fresh loan at reasonable interest rate and terms within the household’s repayment capacity. Tables of Loan Size & Loan Term LOAN SIZE LOAN TERM
351 – 5,000 USD
Small Business 20.3%
portfolio
Agriculture Loan 59.7% Non Business 19.5%
1,400,001 – 20,000,000 KHR 3 – 36 months VISIONFUND CAMBODIA ANNUAL REPORT 2016
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II. savings
as the children who intent to save for them self in order to achieve their children’s future goal such as higher education, business startup ... etc..
1. SOCIAL INVESTOR TERM DEPOSIT
Tables of Currency, Minimum Deposit, Term & Annual Interest Rate
Definition: Social Investor Term Deposit (SITD) is a kind of interest-bearing and contract-based savings accounts that require account balance to be placed within a specific contract with particular period of time.Those who place their money in this account for longer term will gain higher interest rate. Cash deposited in this account will be upheld and restricted from withdrawal till maturity date. Tables of Currency, Annual Interest Rate
Minimum Deposit,
Currency
KHR & USD
Minimum Deposit
KHR 4,000 / USD 1
Term
Until children reach 18 years old
Annual Interest Rate
9.6% (KHR) and 7.25% (USD)
HOPE
Term &
Currency
KHR, USD & THB
Minimum Deposit
KHR 100,000 / USD 25 / THB 1,000
Term
Unlimited
Annual Interest Rate
3.25% up to 10.50%
Hope Savings 70%
Best Child 4%
ACCOUNT
2. HOPE SAVING ACCOUNT Definition: Hope Savings Account (HSA) is a non-compulsory saving product designed for entrepreneurs, NGO staff, civil servants, private company employees, workers, loan borrower, supplier, housewives, businesspersons, students, entities, and foreigners in Cambodia who are willing to voluntarily deposit their money in a trustworthy and reliable place.
SITD 26%
HOPE
Tables of Currency, Minimum Deposit, Term & Annual Interest Rate Currency
KHR, USD & THB
Minimum Deposit
KHR 4,000 / USD 1 / THB 40
Term
Unlimited
Annual Interest Rate
3.00% up to 4.50%
3. BEST CHILD ACCOUNT
Hope Savings 15.79%
SAVINGS BANLANCE
Definition: Best Child Account is a non-compulsory saving product designed to meet the needs of the parent or relatives who wish to save for their children below 18 years old as well SITD 82.65%
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Best Child 1.56%
III. Local Money Transfer I. INTER-BRANCH MONEY TRANSFER Definition: Money Transfer service allows customer to transfer or receive money through all VisionFund’s Branches nationwide to manage cash flow ideally for business or personal purpose. There are two currencies (USD and Riel) available to serve customer needs, with the minimum transferring fee starting from 0.10%.
II. INTER-BANK fund TRANSFER (fast) Definition: Inter-Bank Money Transfer is a service with the National Bank of Cambodia (NBC) that customer can use to transfer their fund conveniently between financial institution (Bank and MDI), in order to provide a convenient and real time service to customers with the purpose of sending money to beneficiary account. This service can be made with Khmer Riel, up to 40 million.
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BRANCH NETWORK AND OPERATing AREAS
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MYANMA LAOS
THAILAND
CAMBODIA
VIETNAM
CURRENTLY, VISIONFUND CAMBODIA HAS 20 PROVINCIAL AND 119 DISTRICT BRANCHES COVERING 25 PROVINCES 192 DISTRICTS, 1,515 COMMUNES AND 8,788 VILLAGES.
COVERAGE AREA NEW DISTRICT BRANCH OFFICE IN 2016 PROVINCIAL BRANCH OFFICE DISTRICT BRANCH OFFICE WORD VISION CAMBODIA ADP VISIONFUND CAMBODIA OPERATION VISIONFUND CAMBODIA ANNUAL REPORT 2016
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Happy family with decent life VisionFund provides WASH (Water Sanitation & Hygiene) Loans to all customers for better healthcare and sanitation for their families.
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SOCIAL IMPACT Following Christ’s call and in line with our social mission, visionfund Cambodia has remained strongly committed to reaching out to poor households most in need of a helping hand-up. 2016 was another exciting year for us in continuing our efforts and hard work to improve the opportunities available to our clients and their families. We had a chance to pilot a ground-breaking loan with an embedded health & personal accident insurance product at no cost to the clients. We expanded a debt relief loan product to give overindebted clients the hope associated with the opportunity to work their way out of the debt. Our social loans, which account for over 20% of the total portfolio, were delivered to improve education, water quality, sanitation and housing of the rural households. What was also highly noted in 2016 is the CERTIFICATION that we received from the SMART Campaign as a testament to our hard work and genuine commitments to implementing and complying with the CPPs (Client Protection Principles) for “Do No Harm” to clients.
VisionFund Cambodia is privileged to serve low income households who are living mainly in rural areas, where the need is greatest; while at the same time other MFIs are moving up scale to serve the better-off segment of the population. Our loans (79%) are concentrated in rural areas. Each year, we spend (>10% of net profit) as part of reinvesting back to clients and communities to run various social programs and initiatives, such as best client selection, child scholarship, youth education, specifically designed products for vulnerable/disadvantaged groups including HIV/ AIDS affected and OVC households, job placement and employment for local community youth, other charities and donations. Based on the Progress out of Poverty Index (PPI), which VisionFund has used since 2012 for client poverty outreach and measurement, we found that VisionFund had brought a positive change and impact to the lives of our clients, their households and children. The PPI sample found almost 16% of overall households, who are VisionFund clients, had moved from below to above National Poverty Line (NPL), while women performed better than men in the movement. That meant their poverty rate had dropped down from time to time, due to their access to VisionFund loans and other enabling factors.
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SOCIAL PERFORMANCE HIGHLIGHTS
• •
• •
•
•
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personal accidents insurance, etc. to serve more poor households in the rural areas
Strongly driven by gender and women’s empowerment (93% female borrowers) A groundbreaking loan with an embedded health & personal accidents insurance product successfully piloted and rolled-out to all branches at no cost to clients Over 238,000 client households and their children impacted by VF financial services A debt relieving loan product widely expanded and rolled out to give over-indebted clients the hope associated with the opportunity to work their ways out of the debts Average loan size of the grouped loan at US$ 216 (18% below Cambodia GDP/ capita at US$1,228 showing that VF Cambodia has maintained a strong focus on poverty More diversified social/CWB (Child Well Being) products, such as WASH loans, LPG cook stove loan, solar energy loan, debt relieving loan, education loan, child’s savings, micro health &
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•
•
•
Our WASH program is fully scalable with a dedicated team in place working closely with partners, constructors and all other stakeholders down in the communities Client Protection Principles (CPPs) certification award received from the SMART Campaign for demonstrating and complying with a strong, genuine commitment and best practices to protecting and caring for clients CWB survey found >99% of surveyed clients reported some types of benefits for their children because of the loan clients had received. The top 3 CWB Outcome Benefits reported are: 1. Improved Sanitation (74%) 2. Sufficient Drinking Water (68%) and 3. Children’s Health Cost Covered (67%).
2016 SOCIAL PERFORMANCE REPORT CARD DESCRIPTION
2016 CLIENT (#)
%
PORTFOLIO (US$)
%
Products & Services A. Loan Product 151,951
64%
$83,496,782
58%
Clients for Small Business Loan
Clients for Agriculture Loan
28,629
12%
28,960,599
20%
Clients for Non-Business/Social Loans (i.e. WASH loans, green loans, education loans, and other nonbusiness loans)
58,410
24%
31,231,408
22%
51,144
70%
5,633,473
16%
1,845
3%
29,797,305
83%
19,890
27%
644,776
1%
100%
N/A
N/A
122
0.05%
N/A
N/A
B. Savings Product Savers for Hope Savings Savers for Social Investor Term Deposit Savers for Best Child Savings C. Non-Financial Products/Services Policies issued through PKMI New/incoming clients received financial education Best Clients selected annually Geography Outreach Districts Provinces/Cities
140 25
Client & Portfolio Outreach Borrowers in rural areas
211,394
88%
113,484,620
79%
Women loans
222,468
93%
131,114,757
91.25%
Group loans
169,032
71%
36,517,935
25%
Total loans
238,990
100%
143,688,789
100%
48,984
67%
14,063,515
39%
Women savers
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Poverty Targeting and M&E Poverty assessment
Using PPI tool to measure the poverty level of all new/ incoming clients and all recycled clients in odd loan cycles
Poverty tracking and reporting
PPI scorecard of individual clients encoded and tracked in banking system. Data extracted banking system for monthly report to staff and management for their information, decision-making and actions
Social Performance (SP) reporting
• •
Key SP indicators and progress consolidated and reported by VisionFund on a monthly basis to staff and management for reference, decision-making and actions thereafter Key SP indicators and SP progress consolidated and reported by VisionFund International on a quarterly basis to update VFI leadership as well as the network MFIs
Social Responsibility to Staff Staff trained/ refreshed on SPM including CPPs
All staff
Staff performance appraisal
Social indicator integrated with key performance indicators to balance between social and financial focus as well as to drive Social Performance
Social Responsibility to Clients Client complaint mechanism
All in place, such as client’s suggestion box, hotline #, walk-in complaints, direct complaints to supervisor/ manager, etc.
Client Protection Principles (CPPs)
Institutionalized and complied. CPP assessment conducted by external parties to measure how VisionFund has applied and complied with client protection
Social Responsibility to Community & Environment
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Key field staff trained on environmental protection
Field staff trained on environmental protection to deliver environmental protection message to clients
Employment
Local people/ youth highly encouraged and recruited for jobs with VisionFund
Portion of net profit spent for creating value for clients and communities
A certain amount of net profit annually set aside for incurred cost on social activities/ charities/ donations to create value for clients and communities
Clients linked to benefit from non-financial services delivered by NGOs and other social partners
VF clients are linked to development program activities of NGOs and other social partners, such as WVI-C, Water.org, RLDO, Made for Life, Rotary Club/ Sustainable Cambodia, NRG, LES, EDM, iDE, Hydrologic, WaterSHED, Habitat for Humanity, PKMI, KAMWORKS, Plan International, Hagar, CEDAC, PATH, ILO, UNIAP, Oxfam GB, etc.
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MEASURING CLIENT POVERTY AND IMPACT
CHILD WELL-BEING (CWB) AND IMPACT
PROGRESS OUT OF POVERTY INDEX (PPI)
VisionFund is unique in our focus on children and communities. We’re driven by desire to improve the lives of children living in poverty. To measure impact related to client households and especially their children, we’ve captured Child Well-Being (CWB) data to better understand how our services help children related to the changes in their household income, number of children helped and what CWB benefits the client has seen from the previous loan and expects with the new loan.
VisionFund Cambodia uses PPI to measure the poverty level of all new/incoming clients and the recycled clients as well as to track the poverty movement of clients over a period of time. Having used the PPI, VisionFund Cambodia is highly confident of targeting the right clients and their households, who are often left out or excluded from formal financial services/ banks. We have seen our clients make enormous strides as they build their household income, improve their access to clean water and nutritious foods, send their children to school and then university, and improve their homes.
Based on CWB data, we’re able to analyze and found over 99% of 38,425 sampled clients reported some types of CWB benefits for their children because of the loan the client had received. Among those clients who said the loan helped their households and especially their children:
Based on a sample of over 6,700 households, we’ve seen almost 16% of overall households moved from below to above National Poverty Line (NPL), while women performed better than men in doing so. % of clients move to above NPL
20 15
15.7%
15.5% 13%
10 5 0
WOMEN
MEN
OVERALL
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CLIENT PROTECTION AND COMPLIANCE VisionFund Cambodia takes client protection seriously, making sure that we do no harm to clients. We’ve therefore mainstreamed client protection, care and compliance in our daily operational activities. We believe in “Keeping Clients First”. This year, we’re very proud and blessed to receive CPPs/ SMART certification from the SMART Campaign, a global initiative to incorporate strong client protection practices into the microfinance industry, for demonstrating and complying with a strong, genuine commitment and best practices to protecting and caring for clients.
CREDIT WITH EDUCATION As a social oriented MFI, VisionFund Cambodia ensures clients are educated on financial literacy, basic entrepreneurial concepts, basic healthcare, etc. while they are using the loans to generate their household income. In fact, we provide basic financial literacy education to every new/incoming client. This covers topics related to maximizing income, minimizing expenses and savings. Throughout 2016, we had a chance to scale up the pilot of the Embedded Education module, which covers avoiding over-indebtedness. Among its sessions, we found clients were satisfied with this new training module and that their knowledge increased.
BEST CLIENTS AND CHILD SCHOLARSHIP VisionFund has reinvested its profit back to the communities as part of our social responsibility toward clients to encourage them to grow their businesses and utilize loans successfully. VisionFund conducts screening and has selected best clients every year since 2007. Once clients are selected as the best ones, VisionFund gives them recognition awards. As of Dec’16, VisionFund has screened and selected 122 best clients nationwide. There are now 96 children still active and receiving support from VisionFund. Furthermore, donors such as World Vision Singapore (WVSGP) and World Vision Hong Kong (WVHKG) also support child scholarship and child savings. Both donors fund $100 per child per year for the child scholarship and
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$120 per child per year for the child savings, and 331 children remain supported. We’d like to thank WVSGP and WVHKG for their compassionate heart for the children of Cambodia.
WASH AND GREEN FINANCING TO ENSURE THE AVAILABILITY OF CLEAN WATER, SANITATION AND ENVIRONMENTAL PROTECTION VisionFund is the first MFI in Cambodia to launch and deliver WASH and green financing. We’re proud of that, and we’ve pioneered it since 2011 in collaboration with NGOs and social enterprises. Given such a financing model, more rural households can access WASH facilities for an improved healthcare, which results in their focused attention to generate household income to feed their children. As of Dec’ 2016, we’ve continued to expand the program touching the lives of 123,454 rural households for the installation of WASH facilities, such as water filters, water tanks, latrines, and other water storage facilities. Loans disbursed in WASH sector total over US$8 Million. WASH facilities are not just for ensuring WASH but also contribute to environmental protection. The benefits of WASH facilities are quite obvious. With WASH facilities at home, rural households do not pollute the environment as they often do so when using an open field or nearby bush. A study commissioned by the World Bank found the economic returns from investing in sanitation are more than double the cost invested – in excess of US$2 returned per dollar invested. In terms of health benefits and environmental protection, VisionFund has also financed solar energy products and LPG cookstoves with various social partners, who acted as the product suppliers. We’re engaged in financing solar energy products to light up remote rural villages, where the public grids are not yet made available. That’s part of our contribution to reducing global greenhouse gases and allowing child education at night. As of Dec’ 2016, we’ve reached out to almost 10,000 households with loans for LPG cookstove and nearly 2,000 households for solar energy products. The total loans disbursed amount used to almost US$1.5 million.
RESTORING HOPE OF OVER-INDEBTED HOUSEHOLDS In 2016, we collaborated with WVI-C to launch and deliver a Debt Relieving Loan (DRL product). This type of loan is given to over-indebted households to pay off high interest loans from all money lenders. These most vulnerable households are then able to work their way out of debt. They become financially empowered and highly focused on improving their living condition and livelihoods. To assist households with disabilities to generate household income and eventually improve their livelihoods, VisionFund also provides credit for these most vulnerable/disadvantaged groups. As of now, we’ve reached out to nearly 1,000 most vulnerable/ disadvantaged households affected by over-indebtedness and or/any form of disabilities with a total loan portfolio of almost US$ 1 million.
SOCIAL FINANCING FOR AGRICULTURE COOPERATIVES (ACs) ACs play a key role in local communities catalyzing growth and economic activity and providing services for farmers, especially the poor, as well as linking agricultural producers to markets and buyers. ACs need to have a key income generation activity/ business to support their cooperative members to ensure group sustainability. However, when they need a start-up capital and or/ more capital for expanding their business they find it hard to access. VisionFund has delivered Social Cooperative Loan (SCL) to ACs, especially in those areas where WVI-C operates. Our loans allow ACs to have adequate capital to start up and or/ expand their businesses, such as purchasing fertilizer for rice farming, setting up gas stations, constructing storage facilities for distributing agriculture products, etc. Once they generate regular income for their cooperative, they share it with their AC members. Then, their children are well taken care with food security, education and clothing. As of Dec’ 2016, we’ve reached out to 33 ACs (US$211,600 portfolio) in the target areas of WVI-C.
EMBEDDED MICRO INSURANCE VisionFund is very proud to work alongside our partners to bring additional benefits or what is so called “micro insurance” to clients and their households. We’ve collaborated with insurance providers/partners to provide 2 types of micro insurance for loan clients, their household members and depositors/savers: A. Micro health and personal accidents insurance with borrowers – financial protection for healthcare and disabilities VisionFund has launched micro health and personal accidents insurance in collaboration with Prevoir a French affiliate insurance company, to deliver this service directly to the borrowers and their household members. The provision of micro health and personal accident insurance results in a substantial improvement in availability and quality of rural healthcare in Cambodia. Borrowers and their household members benefit from the coverage of small surgery, in-patient treatment and other accident-related treatments. It should be noted that throughout the course of 2016 VisionFund piloted the embedding of micro health and personal accidents insurance in the loan at no cost to its borrowers. Following the pilot, beginning in December 2016, VisionFund embed it in loans at no cost to clients. As of Dec’ 2016, we’ve served 75,419 clients who are covered by this insurance package.
B. Micro health and personal accidents insurance with savers – Double Safety Program VisionFund has continued to work with Prevoir to provide free micro health and personal accidents insurance to savers who have deposited US$1,500 in over a term deposit of greater than 6 months. We’ve launched this insurance coverage to depositors since 2015 as part of our“Double Safety” program, meaning that depositors will have a double safety insurance with VisionFund in terms of their savings with VisionFund and free access to healthcare. As of Dec’ 2016, there have been 1,302 depositors covered with this free insurance package.
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This small package of health insurance has HAD a huge impact on rural communitIES since it helps ENSURE THE HEALTH AND WELLBEING OF FAMILIES
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TEN days earlier, no one would probably see her Mrs. Pherng Rin, 36 years old, is a farmer living in Barol village, Kantreng commune, Prasat Bakorng district, Siem Reap Province. After getting married to Mr. Preng Lyhouth, 41 years old, they have created a small family of 3 children all of which are enrolled in school. Currently, Rin is one of many clients who have received a number of loans from VisionFund. Unfortunately, in early 2016 Rin fell terribly ill with symptoms that could not be defined by a village doctor. Therefore, she decided to make an appointment with a well-trained doctor, and learned that she had an appendix which needed to be immediately removed. However, she could not afford to do it as she had to support her children to go to school. Fortunately, she recalled she was covered of health insurance as she had taken loan from VisionFund. Her family did not have to worry about the expense for her medication and surgery. VisionFund bought its health insurance package from “Prévoir (Kampuchea) Micro Life Insurance Plc”. All clients spend only US$5. More importantly, all clients who borrow from VisionFund get free health and
accident insurance with the expenses covered by VisionFund, and some or all of the loan is written-off if our client accidentally dies. If Pherng Rin had not received this health insurance, her family would have faced a severe financial constraint potentially resulting in the children leaving school. Her husband may have left the country to financially support the family. This health insurance has helped a lot of VisionFund clients and aligns with our mission of improving the lives of our clients and particularly their children. Rin told us that “This small package of health insurance has had a huge impact on rural communities since it helps ensure the health and well-being of families. If there was no such offering from VisionFund, I do not know whether I would have survived or not. Last but not least, I would like to pay a heartfelt thanks to VisionFund Microfinance Institution for providing loans for my small business and gave us health insurance“.
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CORPORATE EVENT HIGHLIGHTS
The Grand Opening OF THE new Visionfund office VisionFund was pleased to publicize the opening of the New Head Office Building at #398, Preah Monivong Blvd., Sangkat Boeng Keng Kang1, Khan Chamkarmon, Phnom Penh, Cambodia. The Official Grand Opening was attended by Her Excellency Neav Chanthana, Deputy Governor of the National Bank of Cambodia, His Excellency William A. Heidt, United States Ambassador and our distinguished local and international guests.
MOU and Press conference Embedded Insurance on EMBEDDED On December 5th, 2016, collaborating with Prevoir Kampuchea MicroLife Insurance, VisionFund held a press conference on “The Embedded Health Insurance in Loan products” at Sunway Hotel. VisionFund announced that it would be offering a new beneficial item “Microhealth & personal accident insurance” for borrowers at no cost to them.
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Press Conference and Client Protection Principles Certificate Awarding Ceremony The Smart Campaign, a global initiative to incorporate strong client-protection practices into the microfinance industry, has publicly recognized VisionFund Cambodia as Client Protection Certified for meeting strong standards of client care. The Client Protection Initiative aims to contribute to the promotion of responsible finance with a view to ensuring a sustainable growth for the microfinance sector in Cambodia. The main objective of Client Protection is to fight against the risk of client over-indebtedness.
TOP 3 OUTSTANDING CUSTOMER SERVICE OFFICERS Following our theme for this year “Embracing Changes“, VisionFund encouranged all staffs to unleash their potential, develop their career growth and prepare for future changes. Leaping forward to the era of advanced technology usage, we believe that only the most persistent, innovative and flexible candidates will be able to remain in this strong competition. So, we have chosen and awarded the top three outstanding Customer Service Officers, who demonstrated a very strong commitment in fulfilling their jobs with great outcomes with a fully-covered ASEAN trip on November 4th, 2016 at Head Office of VisionFund.
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Bonn Phum 2016 Impressed by a group of enthusiastic youth to preserve and promote Khmer arts & Culture, VisionFund sponsored “BONN PHUM 2016” which was held on April 08-10, 2016 at Wat Chhroy Ampel. VisionFund supported the event as we want to bring our culture alive, build brand awareness, and introduce our new savings product and promotions to the local people.
CMA Event (Microfinance & Small Enterprise Exhibition) VisionFund Cambodia joins Microfinance & Small Enterprises Exhibition on March 1215, 2016 which was organized by Cambodia Microfinance Association (CMA) with the support from the National Bank of Cambodia (NBC) at Koh Pich City Hall. The main purpose of joining this event was to promote VisionFund’s financial services including savings, loans and local money transfer to the public, and to raise awareness and establish a closer relationship with our customers.
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Radio Talk Show We were honored to be invited as a guest speaker on Radio Show 103MHz for the topic “Is it a good idea to borrow money for paying tuition fee?� on March 27 2016. It was a privileged moment to share some experiences about how beneficial it is to ask for an education loan to students who wish to pursue higher degree but cannot afford to.
Talent Quest Talent Quest, one of many competitions initiated by World Vision InternationalCambodia which asked participants to show their talent in sending a message related to education through singing, dancing, playing music instrumental or filming a short story, was supported by VisionFund. The main purpose of this competition is to promote literacy and youth in Cambodia.
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Cultural Day Under the theme of “Culture and Livelihood,” this year Cultural Day event attracted more than 1,500 participants to come and enjoy various performances including traditional dance, ASEAN dance and other special Khmer performances/shows. Meanwhile, many people were also circling around VisionFund’s booth to learn about our products and services especially as they could win a special gift through some fun activities and games.
Couple Run Charity It is more than just a friendly running race; it is the act of donating funds to support Kunthak Bopha Hospital in Phnom Penh. On February 14, 2016, VisionFund decided to be a part of the charity event in order to help vulnerable and innocent kids that were seriously ill in the hospital.
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The 3rd Angkor Empire Full and Half Marathon Always among the predominant Microfinance Institutions in Cambodia, VisionFund has actively supported a variety of charity events. This includes 3rd Angkor Empire Full & Half Marathon which is not only a platform to encourage the public to participate in sport but also donates to Kunthak Bopha Children’s Hospital, VisionFund sponsored the event which took place on August 7th, 2016 in front of Angkor Wat Temple with 2,370 local and international runners.
Domrei Angkor charity concert With a strong desire to support original Cambodian songs and to donate to Kunthak Bopha Hospital, “Domrei Angkor Charity Concert” appeared again in 2016 at Koh Pich Theater Hall on August 27, which was bigger than the previous event. Strongly committed to our vision to help the poor and children, Visionfund Microfinance participated in the concert to save the life of terribly-sick children in Kunthak Bopha Hospital and to enable the smooth functioning of the concert.
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Environmental and employment data at a glance ENVIRONMENTAL PERFORMANCE INDICATORS MATERIALS Paper in kg/FTE(1) Loan form in kg/FTE Office paper in kg/FTE WASTE Waste paper in kg/FTE Tissue in kg Hand Towel in kg Toilet paper in kg ENERGY Electricity in kWh/FTE Gasoline in I/FTE Gasoline for motorbike in liter Gasoline for vehicle in liter Diesel in I/FTE Diesel for generator in liter Diesel for vehicle in liter Lubricant in I/FTE EMISSION OF CO2 (EQUIVALENTS - IN THOUSANDS OF KG)(2) Electricity Gasoline Diesel WATER Water in m3/FTE Water in m3 Drinking water BUSINESS TRAVEL By vehicle in km/FTE By motorbike in km/FTE SOCIAL PERFORMANCE INDICATORS EMPLOYMENT Number of staff Female Male Number of staff (FTE) (1) FTE: Average number of full-time co-workers during the year. (2) The CO2 equivalent is referred to the Greenhouse Gas Protocol calculation principles.
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2014
2015
2016
34.6 20.9 13.7
40.0 17.0 23.0
33.6 11.0 22.6
1.24 424 231.8 724.7
2.94 1,634 952.8 1,420.8
1.00 1,452 32.2 66.3
420 239 264,634.0 0 50.1 1,905 53,658 N/A
637 215 291,269.7 1,305 51.0 4,274 65,226 N/A
494 249 384,342.7 1,207 51.0 4,847 74,005 N/A
256.4 635.1 153
477.1 702.2 191
420.8 925.3 217
23.1 25,305 362
23.0 30,892 361
24.6 37,660 489
569 8,901
560 8,713
531 10,205
1,145 373 772 1,109
1,420 513 907 1,362
1,489 554 935 1,549
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VisionFund Supports Girl’s Education in Rural Communities
Possessed with a strong-willed and humble attitude, Khoun Thida is one of the few girls in her village who just graduated from high school as the top forth in Samdach Decho Hun Sen Roleang Chhouk High School with Grade C. Living with her parents in Kroheang Village, Somroung Toung District, Kompong Speu Province, Thida is the sixth child within eight siblings that receives the highest education. Brought up in a low-income-family, she was discouraged from getting a good education. Some people said “Your family is poor why don’t you quit school and search for a job to help your family. Look at the other children; they already working at the factory and sending money to their parents unlike you.” Even though she often heard these kinds of harsh words, she never thought of give up school. Every day she traveled a long distance from house to school and back, and needed to pack her own lunch as she could not afford to buy it. By seeing her strong commitment to pursuing her dream and how her family has faced financial difficulty, in late 2013 VisionFund decided to provide school materials, school uniform and some money to support her studies. Thida’s mother, Ms. Mom told VisionFund that “I always motivate her to keep on studying as she is the most outstanding kid among her siblings. Even though it requires my husband to be a motor taxi-driver and for me to do some micro businesses at home, we want her to get an education as we often push her to do her best at school.” Thida added, “Because of the encouragement from parents and the scholarship from VisionFund, it
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
Because of the encouragement from parents and the scholarship from VisionFund, it inspires me to put more effort into studying and I think that if I choose to quit school and work at A factory now, my life will stay dark and my family will remain in poverty
inspires me to put more effort into studying and I think that if I choose to quit school and work at factory now, my life will stay dark and my family will remain in poverty.” Equally important, Thida is an outstanding student of mathematics, literature and physics. She is one of the top 3 math students in Kompong Speu Province. Furthermore, her dream is to be a math teacher so that she can transfer her knowledge to the next generation. She is one of 313 students chosen by VisionFund to receive a scholarship to continue their high school education.
Chhun Channa emotionally told us, “The scholarship that VisionFund gave to me is more than just financial and material support, it is like a big hope for me and my family. Because of it, I decided not to quit school and even have a dream to pursue my study at the university level.”
of the father is one because my ly, me a te e na id tu ov or “F ed to pr sionFund decid cere sin y m s best clients, Vi es pr wanted to ex s ay alw es I . do ip scholarsh scholarship, it three years of e es lfth se r a fo e m ks than er and gives to study hard e m e ag ur co en id Kem Chan. confidence.” sa
VISIONFUND CAMBODIA ANNUAL REPORT 2016
57
VisionFund credit is creating texture of Khmer silic, Takeo Province
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
financIAL REPORT VisionFund’s robust financial performance has helped maintain its organization ranking amongst Cambodia’s top performing microfinance institutions.
Earning a net profit of US$ 3.5 Million for 2016, the institution has total assets of US$167 Million, equity of US$31.2 Million and a return of equity 11.7% .
VISIONFUND CAMBODIA ANNUAL REPORT 2016
59
BALANCE SHEET
As at 31 December 2016 2015
2016 KHR’ 000
KHR’ 000
US$
US$
ASSETS Cash on hand Deposits with banks Loans to customers - net Other receivables Amounts due from a related parties Statutory deposits Investment
6,652,246
$1,647,819
5,293,721
49,829,728
12,343,257
43,558,926
$1,307,092 10,755,290
573,461,695
142,051,448
507,761,910
125,373,311
11,748,243
2,910,142
10,064,172
2,484,981
2,443
605
9,306
2,297
16,677,939
4,131,271
12,476,109
3,080,521
61,980
15,353
62,180
15,353
Property and equipment
8,791,292
2,177,679
6,576,638
1,623,861
Intangible assets
3,897,863
965,535
3,548,031
876,057
722,225
178,327
Deferred tax assets, net
1,477,209
365,918
672,600,638
$166,609,027
145,642,186
$36,076,836
95,215,544
$23,510,011
9,223,955
2,284,854
37,996,234
9,381,786
23,989,423
5,942,389
18,311,744
4,521,418
3,080,761
763,131
3,346,205
826,223
Borrowings
364,546,639
90,301,372
323,048,234
79,764,996
Total liabilities
546,482,964
$135,368,582
52,345,700
$12,966,485
TOTAL ASSETS
590,073,218 $145,697,090
LIABILITIES AND EQUITY Liabilities Deposits from customers Amounts due to related parties Other accruals and payables Provision for income tax
477,917,961 $118,004,434
Equity Share capital Additional capital contribution
44,365,400
$10,954,420
-
-
7,980,300
1,970,444
73,771,974
18,273,960
59,809,557
14,767,792
Total equity
126,117,674
$31,240,445
112,155,257
$27,692,656
TOTAL LIABILITIES AND EQUITY
672,600,638
$166,609,027
Retained earnings
590,073,218 $145,697,090
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
INCOME STATEMENT
For the year ended 31 December 2016
2016
2015
KHR’ 000
US$
Interest income
146,762,484
$36,354,343
121,507,993
$30,001,974
Interest expense
(41,937,706)
(10,388,334)
(32,114,768)
(7,929,572)
Net interest income 104,824,778
$25,966,009
89,393,225
$22,072,402
2,548,341
631,246
1,645,807
406,371
Operating income 107,373,119
$26,597,255
91,039,032
$22,478,773
(7,019,868)
(1,738,882)
(2,864,538)
(707,293)
(82,572,909)
(20,454,027)
(68,040,868)
(16,800,214)
Profit before income tax
17,780,342
$4,404,346
20,133,626
$4,971,266
Income tax expense
(3,817,925)
(945,733)
(4,373,916)
(1,079,979)
Net profit for the year
13,962,417
$3,458,613
15,759,710
$3,891,287
Other operating income
Allowance for bad and doubtful loans Operating and other expenses
KHR’ 000
US$
VISIONFUND CAMBODIA ANNUAL REPORT 2016
61
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2016 Share capital KHR’000
Additional capital contribution KHR’000
Retained earnings KHR’000
40,362,700
4,002,700
44,049,847
88,415,247
Converted from borrowings
-
7,980,300
-
7,980,300
Transferred to share capital
4,002,700
(4,002,700)
-
-
Net profit for the year
-
-
15,759,710
15,759,710
At 31 December 2015
44,365,400
7,980,300
59,809,557
112,155,257
US$ equivalents
$10,954,420
$1,970,444
$14,767,792
$27,692,656
At 01 January 2016
44,365,400
7,980,300
59,809,557
112,155,257
Transferred to share capital
7,980,300
(7,980,300)
-
-
Net profit for the year
-
-
13,962,417
13,962,417
At 31 December 2016
52,345,700
-
73,771,974
126,117,674
US$ equivalents
$12,966,485
-
$18,739,960
$31,240,445
At 1 January 2015
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
Total KHR’000
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECember 2016
2016 KHR’ 000 Cash flows from operating activities Net cash used in operating activities
2015 US$
KHR’ 000
US$
3,043,014
$753,780
(5,063,091) (2,286,999)
(1,254,172) (566,510)
(3,504,410) (2,035,040)
(865,286) (502,479)
20,333 (7,329,757)
5,037 ($1,815,645)
- (5,539,450)
($1,367,765)
-
-
30,044,303
7,418,346
(28,767,721) 144,465,618 (102,095,827)
(7,126,015) 35,785,390 (25,290,024)
(39,222,453) 161,333,489 (54,202,519)
(9,684,556) 39,835,429 (13,383,338)
13,602,070
$3,369,351
97,952,820
$24,185,881
9,315,327
$2,307,486
10,774,111
$2,660,274
47,166,647
$11,646,086
36,392,536
$8,930,684
Cash flows from investing activities Acquisition of property and equipment Acquisition of intangible assets Proceeds from disposals of property and equipment Net cash used in investing activities
(81,639,259) ($20,157,842)
Cash flows from financing activities Proceeds from related parties Repayments of term loan to related party Proceeds from borrowings Repayments of borrowings Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 January Currency translation difference Cash and cash equivalents at 31 December
- 37,504 56,481,974
$13,991,076
47,166,647
US$
KHR’ 000
2016 KHR’ 000 Significant non-cash transactions Additional capital contribution through conversion of borrowings from a shareholder Share capital through transfer from additional capital contribution
- 55,128 $11,646,086
2015
-
-
7,980,300
7,980,300
$1,976,790
4,002,700
US$
$1,970,444 $988,321 VISIONFUND CAMBODIA ANNUAL REPORT 2016
63
REPORT OF THE INDEPENDENT AUDITORS (extracted from financial statement for the year ended 31 december 2016 and report of the independent auditors) Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation and presentation of financial statements, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Opinion We have audited the accompanying financial statements of VisionFund (Cambodia) Ltd (“the Company”), which comprise the balance sheet of the Company as at 31 December 2016, and the income statement, the statements of changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information as set out on pages 9 to 57. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 31 December 2016, and its financial performance and its cash flows for the year then ended in accordance with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation and presentation of financial statements.
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Our Partners
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
our partners
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VISIONFUND INTERNATIONAL network Total Outstanding Portfolio: US$493,896,000 1,122,930 Total Active Borrowers: US$547 Average Loan: 3,413,110 Total # of Children Impacted: 1,323,697 Total # of Jobs Impacted: 78% Total % of Female Clients:
Latin America Bolivia [FUBODE] República Dominicana Ecuador [FODEMI] Guatemala [FODEMI]
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VISIONFUND CAMBODIA ANNUAL REPORT 2016
Africa Honduras [FUNED] Mexico Peru [CREDIVISION]
Ghana Kenya Malawi Mali [RMCR]
Rwanda [Vision Finance] Senegal [SEMFIN] Tanzania Uganda Zambia
MIDDLE EAST & EASTERN EUROPE ASIA Albania Armenia Azerbaijan Bosnia & Herzegovina
Kosovo Serbia Montenegro
Cambodia India Mongolia Myanmar
Philippines Sri Lanka Vietnam
Statistical data including total outstanding portfolio and active borrowers are found on VisionFund International website: www.visionfund.org for the latest facts and figures.
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Designed by Creative Services Unit | VisionFund Cambodia © 2016
The Annual Report can be accessed in soft copy through our website: www.visionfund.com.kh or in hard copy through Email: vfc_information@wvi.org Building #398, Preah Monivong Blvd, Boeung Keng Kang I, Khan Chamkarmorn, Phnom Penh, Cambodia. Tel: (855)-23 963 333