World Relief Corporations"s Cambodia gateway II

The assessment covers the period 10/96-1/97. To date, Gateway I and its successor, Gateway II, have made extraordinary progress in a difficult and challenging environment. Financial systems and controls are in place that allow WR"s indigenous affiliate, Cambodia Community Building (CCB), to claim a reputation in the community as a well-managed program staffed by highly trained personnel. While management and administrative systems are adequate to manage the current program, formalization and upgrading are required to meet growth targets. The CCB/WR Gateway II program has made a fundamental shift from a health program with a credit component run by an international NGO to a microenterprise credit program run by a local NGO. This shift needs to be completed for the CCB institutionalization process to be completed over the next 3 years. Gateway II"s community banking program provides a valuable service in Cambodia; the program reaches a clientele that is unlikely to obtain financial services from any other source. In the slums of Phnom Penh, it is the only program offering quality, reliable credit service to poor women. Outreach is extremely deep -- loan size ranges from riel 50,000 to riel 1.5 million (U.S. $18 to $555). Average loan size (as of December 1996) was $67. The lending techniques incorporate best practices, including small initial loan sizes, access to larger loans based on good repayment records, group-based guarantees, and rapid processing of repeat loans. CCB/WR staff are dedicated, well trained, and competent. Turnover is low, which is positive for an organization that trains staff in basic skills. Over the next year, CCB/WR should increase in-house training capacity and formalize its training manual. Staff training is a cornerstone of a well-run program, and CCB/WR has excelled here. WR headquarters staff played a valuable technical and institutional development role in the Gateway program. There are trade-offs in sending two promoters to a center at one time. CCB/WR should weigh the security risk, the accountability of a two-member team, and the importance of having one promoter dedicated to presenting the health education sessions with the lower costs associated with only one promoter per bank. The current management information systems are adequate for current operations. However, to achieve the proposed expansion, including an almost threefold increase in loans outstanding, CCB/WR should streamline data management and make sure that systems cannot be readily modified or controls circumvented. Systems are in place to accurately report on the program"s status. Loan delinquency has become a problem with the recent record-breaking floods in Phnom Penh and the murder of two promoters in Kompong Cham. As of 12/31/96, however, delinquency averaged 13.3% for the total portfolio. CCB/WR put steps into place to monitor and control delinquency, and will reschedule and refinance banks affected by the floods. Care must be taken to ensure that both borrowers and staff understand the one-time nature of this procedure. CCB/WR will easily reach its projected targets for the number and amount of loans outstanding. As of 12/96, the number of loans stood at 83% of first-year targets, and the amount of loans outstanding stood at 108% of first-year targets. Income goals will be achieved based on expanded portfolio. However, yield on portfolio for 1996 was 79.3%, instead of the proposed 96.4%. Unless delinquency dramatically decreases and operational efficiency increases, self-sufficiency is not likely to be achieved within the 3-year target. (Author abstract, modified)