A Malaysian banker in Cambodia has turned his attention toward helping poor people get out of the poverty trap in Cambodia.
Chee Chin Hoe is CEO of VisionFund Cambodia, the microfinance arm of NGO World Vision International, a social development NGO, headquartered in Monrovia, California.
For more than a year and a half, Chee’s leadership at VisionFund has been aimed at encouraging low-income Cambodians to develop financial plans for their future.
“When you don’t have any financial literacy, then you don’t think of the need to save for the future. When you don’t have a financial plan, you spend what you have and you don’t see there is any purpose in having a surplus, because in the first place there wasn’t a plan,” Chee said.
“Rather than just depending on fate, if there is a plan, when your children grow up you will be able to have some money for their education. They can also make a plan to see how they can expand their business so there will be more cash surplus,” Chee said.
Chee is a third-generation Malaysian Chinese and at age 54, is the same age as the Malaysian nation.
VisionFund began as a micro credit programme around the world to lend out money to the poor segment of people. Today, VisionFund International, which is a subsidiary of World Vision International, has operations in about 40 countries. Cambodia has the largest number of clients amongst VisionFund International’s network in the other countries where VisionFund is active – more than 110,000.
Chee says while it is important to serve poor people, it is also important for the fund not to be depleted in order to keep surviving and be sustainable.
A career banker himself in Malaysia, Chee saw the VisionFund opportunity as a way to use his existing skills and shift gears toward the lower-income segment of society in Cambodia.
“The fact is that Cambodia has a greater need than Malaysia. I am happy that as a Malaysian, I am able to avail myself to living in another country to serve a greater need,” Chee said.
“Malaysia has enough skill to carry on the development. I want to be able to use my skill and experience to help in a place which has lesser resources and considered less developed than Malaysia; here can I use my life to be more impactful."
Microfinance interest rates on loans are usually higher than those of commercial banks because of the greater number of people and travel involved and the smaller amounts of the loans.
“Generally microfinance rates are higher because of two main factors. One is because of the way microfinance is run. Unlike commercial banks, we lend to large numbers of people with small loans. In serving the poorer community, inevitably our loan size is relatively small. When we give for example one loan of $200 to 100 clients, the commercial bank by comparison will give one loan of $20,000 to a single client – hence our operating cost is multiplied in comparison to a commercial bank.”
Another factor is the higher overheadsassociated with operating in more rural areas, having to travel to rural villages and employing more staff.
“Our operation costs are higher. We ourselves borrow money from commercial lenders to lend to the poor. Most of our lenders are foreign,” he said.
Chee is optimistic about Cambodia because of the openness of the society.
“I think the fact that the government themselves are open, quite open economy, and they are prepared to work with foreign investors, the country is able to develop, not as fast as we would like to see, but they are making reasonable progress.”
As a way to help even out the wide gap between rich and poor in Cambodia, Chee encourages the rich to invest in the poor through projects like VisionFund’s Social Investor Term Deposit (SITD).
“When we look at savings for example, in the society here, we have the very rich and the very poor. About two-thirds of the population is considered poor. What we can encourage is for the local rich to be able to involve themselves more. The further the disparity between rich and poor, the more the instability.”
VisionFund, which operates almost like a bank, is offering a 10% return on term deposits in Cambodian Riel during a promotion period between now and September 30.
“Riel is more scarce than US dollars, the supply is lesser and the cost of borrowing local currency is higher, therefore generally the rates offered for Riel deposits are higher than US dollar deposit,” Chee said.