Phnom Penh, Cambodia, November 5, 2003
– Continuing in its partnership-based approach to creating lasting jobs for the poor in Cambodia, the International Finance Corporation this week agreed to strengthen the business skills of three grassroots NGOs whose projects provide income for people from disadvantaged communities.
In addition to funding these projects, IFC and its regional SME support program, the Mekong Private Sector Development Facility (MPDF), will provide advisory services to help make the new partner groups stronger. The assistance builds on IFC’s recent efforts of this kind in Cambodia, which include supporting the growth of the country’s leading microfinance institution, supporting an NGO-sponsored agribusiness firm that employs the homeless, and providing management support and advisory services to a fast-growing information technology services initiative that hires and trains workers from low-income backgrounds.
Funding announced in Phnom Penh Monday was arranged through the SME Capacity Building Facility (CBF), IFC’s grant window for innovative pilots and partnerships in small business development. The grants will be locally overseen by MPDF, an IFC-managed multidonor SME support initiative for Vietnam, Cambodia, and Laos. In each case IFC and MPDF will mobilize additional funding from other sources. The three NGOs are:
The National Centre for Disabled Persons (NCDP):
Helps newly disabled persons develop daily living skills and get the education and training they need to earn a living. Will use its $20,000 grant to increase local and overseas sales of the handicrafts it markets on behalf of disabled artisans.
Cambodian Health Education Development
(CHED)
: Educates factory workers and youth about general and reproductive health, and will use its $14,500 grant to turn its graphic design and printing unit into a profitable business.
Nyemo:
Provides health and social services and on-the-job training for women who are victims of domestic and other types of violence. Will use its $20,000 grant to make its restaurant, craft production unit, and retail store better known and more profitable.
The agreements were signed today by Harold Rosen, director of IFC’s SME Department, and MPDF Regional Manager Adam Sack. The step was taken in conjunction with a roundtable discussion of ways to cooperate with leading grassroots groups committed to creating employment for the disadvantaged in Cambodia, one of Asia’s poorest countries.
“Many NGOs already have income generation projects that help the poor develop many of the skills needed to run a successful business, such as how to plan, raise money, handle finances, and manage people,” Rosen said. “IFC is in a good position to provide expert advice in additional areas these groups can’t cover on their own, such as improving quality, marketing more effectively, and introducing greater commercial discipline. With these inputs NGO income generation projects should be able to evolve into successful small businesses that create larger numbers of lasting jobs and generate profits to fund their parent organizations’ social programs.”
Since 2000, CBF funding and MPDF expertise have helped a number of Cambodian NGOs build capacity in finance, marketing, and other key business functions, then translate these skills into jobs for the poor. MPDF has also helped secure advice from product improvement specialists and investment from IFC and other sources. To ensure strong commitment from recipients, MPDF’s assistance is always provided on a cost-sharing basis.
Since 1999, MPDF has helped a number of nonprofits develop sustainable businesses. The first of these was the Association of Cambodian Local Economic Development Agencies (ACLEDA), a leading microcredit group. ACLEDA has become Cambodia’s first full-fledged bank targeting micro and small enterprises. It now has 93 outlets in 14 provinces and 100,000 low-income borrowers, 65 percent of whom are women.
Also nonprofits receiving support have included:
Hagar:
An NGO that helps abandoned and destitute women and children rebuild their
lives by giving them shelter, counseling, education, and training. It has used its IFC support in the upcoming launch of the $1.2 million Hagar Soya agribusiness firm, and to expand and improve Hagar Design Limited, now a formally registered company that produces silk items for high-end consumers in Europe, Asia, and the United States.
Digital Data Divide:
A non-for-profit data entry business that has used CBF funding and grants from assorted donors to create more than 100 jobs for land mine and polio victims and provide them with above-average salaries and health, training, and educational benefits. It will soon expand operations to the Lao PDR as a result of new capacity developed with IFC and MPDF support.
Joom Noon:
A project helping land-mine victims and other impoverished people in the remote Preah Vihear province that has used CBF funding to improve production and marketing of the silk scarves and sarongs woven by its target group.
MPDF’s Sack said NGOs in Cambodia clearly have what it takes to set up and run commercially viable businesses: “The successes here show what can be accomplished in other developing countries. We are now documenting Cambodia’s examples for piloting in IFC’s other SME Facilities elsewhere in the developing world.”
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
