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.