Ahkun: A global marketplace for microenterprises

Ahkun: A global marketplace for microenterprises

Cambodia
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

If Ebay and Kiva had a baby, it would be www.ahkun.org. We want to level the playing field for microentrepreneurs, create economic empowerment, and close the circle between the entrepreneur/borrower and the consumer/lender. Microentrepreneurs often lack market access, and don't have the resources to scale their businesses beyond their local communities. Many won't have business support from an MFI outside of a microloan. On the other hand, it's very difficult for conscious consumers to buy directly from small entrepreneurs and support microfinance businesses. We'll change this with an online marketplace facilitating direct trade. This will enable a more equitable and sustainable trade model, reduce consumer costs and more profit for the entrepreneur, and close the microfinance cycle.

About Project

Problem: What problem is this project trying to address?

In our pilot project, we engage bottom of the pyramid communities in rural and urban Cambodia. Cambodia’s GDP per capita is estimated at $2300 annually, but it is most certainly lower amongst women (usually about 75% of levels for men), and amongst rural women especially. All of our entrepreneurs are women, who as a group face particular struggles in Cambodian society, both economically and culturally. Women in Cambodia, especially in rural areas, are often beholden to traditional mores regarding gender, even if they do a large percentage of small scale economic activity. In addition to making less than men, they also tend to have less education, with only about 64% (as of 2004) of women able to read and write, as opposed to 85% of men. 6 of the 7 groups and individual microentrepreneurs that we work are made up of women from rural communities. Their education and work options—other than farming, working at textile factories, or selling in marketplaces--tend to be quite limited. Young women who move into cities like Phnom Penh (like the members of one of our microenterprises—Circle Cambodia), have more options, but they are especially vulnerable to economic exploitation. Cambodia has been a hotspot for international development since the UNTAC mission in the early 1990s. However, economic growth is very unevenly dispersed, and corruption remains a major problem setting back sustainable growth. A large non-profit sector has arisen, with many engaged in grassroots development programs such as microfinance, social enterprise, and skills training and education.

Solution: What is the proposed solution? Please be specific!

Currently, MFIs focus primarily on providing access to capital, without considering what happens after borrowers have taken out a loan to start their business. Although a few organizations (notably BRAC and FINCA Peru) have subsidiaries that focus on creating and marketing goods made by their microentrepreneurs, the vast majority of MFIs do not engage in this. Although focusing on creating access to credit is extremely important, wealth creation only happens with successful, sustainable enterprises. Our innovation by looking beyond microfinance, leveraging information technology to help create sustainable and flourishing entrepreneurs at the BoP. With Ahkun, we’ve created an online marketplace so that any microentrepreneur can sell all over the world, and in profit-sharing with our entrepreneurs, they receive more money than they would have selling in local markets, resulting in wealth creation for themselves and their communities, and reducing the need to take out loans should they choose to scale, or relying on remittances from family members, as is often the case, for their livelihoods. Another innovation is in our “close the circle” model, where microentrepreneurs link back to microlenders by selling them products that they made with the help of microloans. The growing movement of conscious consumers and the success of microlending platforms like Kiva have created a strong demand for products “with a story,” and relationships between the buyer and seller. Now with Ahkun, people can buy products from entrepreneurs that they've lent to.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

We're focused on building an online marketplace to connect microentrepreneurs to everyone else, and streamlining the supply chain to minimize the steps from producer to consumer and make trade as direct as possible. Currently in pilot phase, we have connected and work extensively with seven groups and individual microentrepreneurs in Cambodia. All of them are women, are Kiva microloan recipients, and save for one group, are from rural areas. We hired staff to provide intensive skills and business training in preparation for their starting their businesses. We also helped work out quality control for their products to make them export-standard. To do all of this, we partnered with AMK Microfinance, a Cambodian microfinance institution (MFI) to help us source the entrepreneurs, hire the trainers, provide us with transport to villages that the entrepreneurs, as well as providing interpretation assistance. Our seven microentreprise groups total 36 women from provinces of Cambodia including Kandal, Kampong Speu, and Kampong Speu, and from the capital of Cambodia, Phnom Penh. They produce a variety of handcrafted goods, and we buy directly from them at above fair trade prices, then sell and distribute them through our online marketplace. We profit share with our microentrepreneurs, too, since they ought to benefit from being able to sell for higher prices abroad. We're more than a marketplace though. We're working with local advocacy groups in rural Cambodia to support education, business training, and rights awareness. Development is a holistic process for us, and the marketplace is just one part fulfilling our mission to level the playing field and empower communities.
About You
Organization:
Ahkun
About You
First Name

Anh-Thu

Last Name

Nguyen

About Your Organization
Organization Name

Ahkun

Organization Country

, NY, Kings County

Country where this project is creating social impact

, KL

How long has your organization been operating?

Less than a year

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Innovation
What stage is your project in?

Operating for less than a year

Share the story of the founder and what inspired the founder to start this project

Anh-Thu Nguyen came to Cambodia as a lawyer at the UN Assistance to the Khmer Rouge Trials. There, she encountered a big problem. Despite the need for justice and accountability in helping close a dark chapter in the country’s history, the citizens of Cambodia were beset with immediate economic challenges, which acted as a barrier to full political participation and made the tribunal’s actions less urgent to them in daily life. Meanwhile, she learned about microfinance and how it was developing “Bottom of Pyramid” communities in Cambodia. There was no doubt that the spirit of entrepreneurship was flourishing in the markets of cities and villages in Cambodia. However, there were gaps that needed to be filled. Entrepreneurs could get access more easily through microfinance, but did not have support once they had started their business from that loan. Those in cities could flourish by selling in urban markets, but for those who were further removed in rural areas, local markets provided limited opportunities to make a living. Additionally, entrepreneurs who found themselves unable to pay back their microloans were often in a bind, since loan defaults could mean that property or livestock would be collected upon—a situation that was not ideal, to say the very least. With this in mind, Anh-Thu, started Ahkun with Sanjaya Punyasena, who was working at a local microfinance institution, to create an online marketplace that would sell the products of these microentrepreneurs to the world, and in some small way help create sustainable development.

Social Impact
Please describe how your project has been successful and how that success is measured

Ahkun has been fully operational as of December 2010. We've sold $6500 in inventory, selling out of the first run of scarves by weaver Kakeda Sun, as well as 60% of dresses made by Circle Cambodia, our second group of entrepreneurs. This has been done with no marketing whatsover, and purely through word of mouth. In terms of measurements, we've measured the rate of microloan repayment for our microentrepreneurs, improvement in standard of living, and status of their enterprises to determine the success of our project. Kakeda Sun has been able to buy a new motorcycle for transport of her goods since she's been a part of the Ahkun pilot project. Circle Cambodia has been able to parlay their microloan for sewing machines, and the money they've made from selling their dresses on Ahkun, to create a bigger line of clothing, which they now sell to boutiques across Phnom Penh. All of our entrepreneurs have successfully paid off the microloans they had initially taken out pre-Ahkun participation. The three groups of women who were members of AMK's loan workout program have been able to pay off the microloans that they were at risk of defaulting on, and profits coming the sales of these products will be a great source of supplemental income.

How many people have been impacted by your project?

101-1,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

Ahkun is not just another online marketplace for fair trade goods. We aim to function as a platform linked with microlending platforms like Kiva, so that you can lend and then buy. We also hope to facilitate direct sales between consumers and buyers with virtual storefronts for our microentrepreneurs, like Etsy or Ebay. We plan to expand to southeast Asia, the U.S., and Latin America. We’ll partner with local MFIs and organizations with livelihoods projects to do so. Our take on microfinance is that it is part of a holistic process of development that must include education, legal, and political access for underserved populations (such as women and indigenous groups whom we will with). We plan on working closely with partner organizations in these areas as part of this process.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Anh-Thu Nguyen came to Cambodia as a lawyer at the UN Assistance to the Khmer Rouge Trials. There, she encountered a big problem. Despite the need for justice and accountability and the relevance of the court in helping close a dark chapter in the country’s history, the citizens of Cambodia were beset with immediate economic challenges, which were a barrier to full political participation and made the tribunal’s actions less relevant to them in daily life. Meanwhile, she learned about microfinance and how it was developing “Bottom of Pyramid” communities in Cambodia. There was no doubt that the spirit of entrepreneurship was flourishing in the markets of cities and villages in Cambodia. However, there were gaps that needed to be filled. Entrepreneurs could get access more easily through microfinance, but did not have support once they had started their business from that loan. Those in cities could flourish by selling in urban markets, but for those who were further removed in rural areas, local markets provided limited opportunities to make a living. Additionally, entrepreneurs who found themselves unable to pay back their microloans were often in a bind, since loan defaults could mean that property or livestock would be collected upon—a situation that was not ideal, to say the very least. With this in mind, Anh-Thu, started Ahkun with Sanjaya Punyasena, who was working at a local microfinance institution, to create an online marketplace that would sell the products of these microentrepreneurs to the world, and in some small way help create sustainable development.

Tell us about your partnerships

For our pilot program in Cambodia, we partnered with Angkor Microfinance Kampuchea (AMK), a Cambodia based microfinance institution (MFI), to source and act as a liason with our entrepreneurs. AMK provided Ahkun with a selection of clients receiving Kiva funded microloans who had started craft-related businesses; partnered with Ahkun to sell products made by participants of its loan work-out program, a pilot initiative to provide an alternative to microloan default; and acted as a facilitator between the entrepreneurs and Ahkun, providing transportation to areas where entrepreneurs lived and translation assistance.and The Agora Microfinance Fund, a London based investor in AMK, which provided us with the initial seed capital to hire program officers to provide skills and business training to our microentrepreneurs; develop the products to be sold and facilitate quality control; purchase, store, and ship inventory from Cambodia to the United States. We are currently in discussions with Kiva to integrate their lending platform with Ahkun, featuring and promoting products made by Kiva microlenders in a “closing the loop” model. We have partnered with a Cambodia and Laos based community development non-profit, Village Focus International, as our 501c(3) fiscal sponsor, pending submission of our own 501c(3) application through our pro-bono counsel, the international law firm Akin Gump Strauss Hauer and Feld. We also had the help of several Kiva fellows (field volunteers with Kiva) to help us get in touch with MFIs and microentrepreneurs.

Explain your selections

In order to launch and sustain our pilot project, we have relied on donations, both monetary and in kind, from friends, family, individuals, and businesses that we have reached out to. We have received pro bono counsel from Akin Gump Strauss Hauer and Feld, an international law firm, free office space from a local business, and untold hours of support from volunteers. Ahkun is a fully volunteer-run organization, and our volunteers are composed of professionals from various sectors who have donated time and skills, including website development and graphic design, search engine optimization and marketing, legal support, communications and public relations. We have gained 501c(3) fiscal sponsorship support through an NGO working in Laos and Cambodia, Village Focus Cambodia, and we also received $30,000 in seed funding from AMK Microfinance and the Agora Microfinance Fund. Through our online marketplace, we have had a great deal of support and traction from our customers, with over $6,500 in sales since Ahkun’s inception this past year, without any marketing or press outreach. A portion of the purchases made go towards supporting our operational costs, in addition to supporting the entrepreneurs that we work with. We forsee an earned income model through this marketplace, and through sourcing, becoming the foundation for Ahkun to be largely self-sustainable. This will be in addition to grants and donations we may receive from NGOs, foundations, governments, and businesses in order to cover operational costs.

How do you plan to strengthen your project in the next three years?

We are refining our platform based on lessons learned from our ongoing pilot program. One thing that we have learned is the need to have a consistent presence on the ground to maintain contact with our microfinance partners, to develop relationships with other local organizations working in the development and advocacy sector, as well as to seek out new entrepreneurs and continue work with current ones. We currently lack the resources to have field personnel to perform these functions, but as we grow and obtain more funding, having a field presence will be a top priority. We also plan on more fully surveying our entrepreneurs to determine their business needs, and the needs of their communities more generally. By doing so, we can develop strategic partnerships with relevant organizations, such as those working in social services and education,, and harness networks and resources in order to provide positive impact in the communities that we work in. We also plan on expanding our presence to the rest of Southeast Asia, including Vietnam, Laos, and the Philippines, due to the combination of high quality goods and producers, and a large MFI presence. We may expand to establishing a marketplace for domestic (U.S. based) microenterprises, so as to bring greater awareness and support to microfinance funded businesses in the U.S. In diversifying our entrepreneurs and increasing our global presence, we’ll strengthen our mission and programming to provide market access for all of those who need it.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Restricted access to new markets

SECONDARY

Underemployment

TERTIARY

Lack of access to information and networks

Please describe how your innovation specifically tackles the barriers listed above.

The touchstone of our innovation is that it creates visibility for microenterprises and provides access to new, global markets, through our online marketplace and with the partnerships and sophisticated marketing scheme that we are developing in conjunction. The online marketplace allows for our entrepreneurs to sell to places where they never would have been able to in their villages and towns, due to either lack of access to technology, or infrastructural issues like a lack of reliable postal service. Ahkun also addresses underemployment. The majority of the microentrepreneurs are farmers during the growing season or part time factory workers. Their microenterprises and goods sold through Ahkun provide supplemental income for their families during the low seasons.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

Grown geographic reach: Multi-country

TERTIARY

Enhanced existing impact through addition of complementary services

Please describe which of your growth activities are current or planned for the immediate future.

Currently, we’re working on applications to major foundations such as the Mcknight Foundation in order to build the capital necessary to fund our growth within Cambodia. Additionally, we’re currently in contact with U.S. based MFIs such as ACCION USA to determine the feasibility of having an domestic marketplace for microfinance goods. We'll also be connecting with microfinance institutions in Cambodia, Vietnam, Laos, and the Phillipines in order to determine the lay of the land, and source new groups of microentrepreneurs for the Ahkun marketplace. In the immediate future, we'll also be reaching out to local organizations in Cambodia and international organizations to partner in developing education and training programs for microentrepreneurs,based on their needs.

Do you collaborate with any of the following: (Check all that apply)

NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

We have collaborated with AMK Microfinance and Agora Microfinance Fund, both social mission oriented for profit companies, to develop, provide the initial seed funding, and facilitate the execution Ahkun’s pilot project. Their technical and financial assistance has enabled us to access and build relationships with our microentrepreneurs, and to source their goods. We have also collaborated with social enterprise experts from New York University to help structure our organization, refine our business model, and advise on partnerships with social enterprise accelerators and networks associated with the institution. We collaborate with non-profits supporting equitable community development and fair trade to reach out to community members, organizers, and educators to facilitate our mission.

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