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Lessons from Cambodian startups and entrepreneurs

For a lesson in creativity, pay a visit to Phnom Penh

For a lesson in creativity, pay a visit to Phnom Penh

Paula Skilling

[Startups]

I’ve just returned from meeting small business owners in Cambodia. Speaking with such inspirational entrepreneurs puts New Zealanders’ business struggles in a different perspective. Here, we agonise over the struggles of high taxation, an unfavourable dollar, government bureaucracy and a host of other nuisances.

Cambodia’s recent history is one of tragedy, characterised by poverty and genocide. But Cambodian entrepreneurs—although living in dire poverty—are facing the 21st century armed with hope and an absolute refusal to see themselves as victims. They work hard, and they work creatively.

For the hard-working poor in Cambodia, running a small business usually doubles their income. This sounds great, and it is. But let’s put it in context: the cost of this magazine equates to several days’ income for many Cambodian small business owners, who set up their fledgling businesses when they have a total income of just a dollar or two per day.

The small-scale entrepreneurs I met started and built up their businesses with help from small business loans and training from VisionFund, the microfinance arm of World Vision. Without programmes like VisionFund, these people face paying interest to loan sharks of up to 200 percent per year—try making a profit on that rate.

Veng Touchsim was the first entrepreneur I met. Veng’s home is a shack on the edge of Cambodia’s largest dump, and for many years she eked out a living by scavenging plastic bags from the dump. However, with an initial small business loan of NZ$53, she bought an old sewing machine and some fabric offcuts. Working her capital asset hard, she makes 50 pairs of cute children’s trousers every day. She employs her husband to sell the trousers at the city’s main market.

Veng saved hard and, with a booster loan of NZ$73, bought a small motorbike. Her husband uses the motorbike as a service vehicle to transport her goods to the market. For a fee, he also transports the goods produced by others in the neighbourhood. When Veng’s husband is not using the motorbike, other family members put it to work as a taxi. Veng’s assets never rest.

Like most of the people I met, Veng doesn’t have a large-scale or revolutionary business. Nonetheless, her attitude and determination inspired me. I was also impressed by the difference her business is making to the lives of her six children, all of whom now attend school. Veng, once a homeless scavenger, is now a proud entrepreneur who dreams of a bright future for her children.

Magazine layout

Phann Nga (centre) started her entrepreneurial career scavenging at the local dump, but now she has her own recycling business next door (left). Veng Touchsim (right) turned $53 into her own trousers-and-transport business

She’s not an isolated case. Soeun Sopheap, for example, initially borrowed NZ$130 to buy four pigs—but that was just the beginning. She has used VisionFund loans to build a modern pig farm, including a specialised breeding house. Soeun currently has 43 pigs, five of which are pregnant. Every five months she sells her litters of pigs at the market for around NZ$2,000, netting her a handsome profit to invest in other ventures.

Soeun’s ventures extend to the spacious threshing room and storehouse she built to prepare and house surplus rice crops. Many Cambodian farmers lack dry storage facilities, and they sell rice they harvest but cannot immediately use. Soeun buys rice in bulk, stores it carefully, then resells it when prices are higher.

Nothing goes to waste in Soeun’s house. She started life with so little, she is determined to make the most of every opportunity. She has installed a new roof on her house and sheds, allowing her to collect clean water. More creatively, she has installed bio-gas collection points and an underground tank. The bio-fuel produced by her pigs provides electricity for lighting and gas for a cooker.

Phann Gna was another inspirational businesswoman I met in Cambodia. Her beginnings were also inauspicious—scavenging on Phnom Penh’s dump with her children—but she has become a commercial success.

Helped by savings and a series of VisionFund loans, Phann Gna bought land on the edge of the dump. The space enabled her to aggregate recyclable rubbish into wholesale lots, which she sold to Vietnam. She used another loan to invest in a plastic-mulching machine, which dramatically increased her profit margins. Phann Gna’s next goal is to purchase a machine that transforms the used plastic into useful items such as chairs. There is only one other machine of this type in Cambodia, so Phann Gna sees many opportunities for turning a profit.

Phann Gna, a widow, still lives with her three children in a simple shack on the edge of the town dump. However, this simplicity belies her success. With a bright business idea she is savings towards, 15 employees and an eldest son who is university-bound, Phann Gna is passionate about life.

I was distressed by the abject poverty that so many of Cambodia’s small-scale entrepreneurs are battling to escape. But, like Phann Gna, I’m excited by the opportunities that people are creating. Access to affordable capital and business expertise is transforming the lives of many budding business people in Cambodia. Their optimism is infectious. Try catching some.

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