MIO Business Plan

1. INTRODUCTION AND BACKGROUND

1.1. Executive Summary

Micro Institution Operator (MIO) was established as a legal Microfinance Institution under the

laws of the Kingdom of Cambodia in 2015. Its headquarters are located in Siem Reap;

Cambodia. The department was formed with the purpose of providing social and financial

solutions to the poor. The existing business plan provides a rational framework for the

microfinance part of MIO under MIO Mega Groups Company Limited. The Company was

founded by Mr. Sokun Chan Dara; Chief Executive Officer, who has ten years’ experience in

management. Chan Dara has worked with six different companies; where he was assigned to

task internal audit and development business regulations. Ms.Mihoko Onozawa who along

with Chan Dara actively manages the company, brings with her a wealth of experience having

run companies in Japan, Europe, and the Asia Pacific region. MIO has already started a micro

lending pilot project in Siem Reap-City and has scheduled to expand business to the whole

Siem Reap province by mid-2016. MIO intends to use this small loan model to reach out to

10,000 poor families in Cambodia with microloans over next five years in Siem Reap,

Ordormeanchhey, Banteay Mean Chhey, and Kompong Cham, Prey Veng. After achieving this

goal MIO will expand its business by 2019 to Northwest Region. MIO management’s vision

is to gain self-sufficiency within five years. For that purpose, the management restricts the

fundraising portion with a declining percentage of 100% in year one down to 55%, in year two,

45% in year three and 30% in year four. In 2024, MIO has invested a great deal of its time and

resources to develop these important goals.

1.2. Mission and Goals

MIO exists to empower people economically while ensuring that those who live in poverty are

served in body, mind, and spirit. The springboard of MIO is compassionate micro-finance

lending that includes a range of support services for its members through multiple local

programs in strategic rural and urban areas of Cambodia, and will eventually spread to other

countries in Southeast Asia. By 2034, MIO expects to empower the entire population of 5.5

million Cambodians to move out of extreme poverty through strategic goals:

a) Microfinance: This includes urban and rural lending, community owned banking, and asset

development strategies.

b) Community Investment: This comprises consumer-owned businesses, family businesses,

social businesses, and social investment. c) Entrepreneurial of Entrepreneurship: This involves small-business development, hands-on

learning, technical know-how culminating in self-employment, and life skills development.

d) Dynamic social network: This involves sharing resources, local and global interdependence,

and mobilization of social networks.

As a Microfinance Institution and as known as operating systematic financial, MIO intends to

increase opportunities for the poor to access financial services by providing financial services

to low income entrepreneurs and low income earners. This will involve mobilizing deposits

from members and non-members and then loaning a certain percentage of these funds to urban

and rural producers, traders and small scale farmers. MIO‘s core values are enhancing their

clients ‘self-determination, serving as an ongoing financial resource for members, and

achieving significant outreach and financial self-sufficiency.

e) Community Contribution: MIO intends to contribute to the social and local organizations

across the community and give heartfelt aid to orphanages, schools, hospitals and other such

community based welfare organizations.

1.3. Macroeconomic Situation in Cambodia

The Kingdom of Cambodia is situated in Southeast Asia and part of Indochina area; with a

total surface of 181,035 square kilometers and a population of 15.14 million. Cambodia is a

Southeast Asian nation whose landscape spans low-lying plains, the Mekong Delta,

mountains and Gulf of Thailand coastline. Its busy capital, Phnom Penh; Cambodia gained

its independence in 1991 after the peace agreement in Paris. Cambodia initiated a political

transformation process to a multi-party system with United Nations funding (UN). The Gross

Domestic Product (GDP) in Cambodia was worth 15.25 billion US dollars in 2015. The GDP

value of Cambodia represents 0.02 percent of the world economy. GDP in Cambodia

averaged 4.23 USD Billion from 1960 until 2013, reaching an all-time high of 15.25 USD

Billion in 2013 and a record low of 0.51 USD Billion in 1972.GDP per capital for the lowest

income is between $950, and the above average is between $2945 compared to

unemployment rate in a whole country 0.7%. The gross domestic product (GDP) measures of

national income and output for a given country's economy. The gross domestic product

(GDP) is equal to the total expenditures for all final goods and services produced within the

country in a stipulated period of time. Between 2006 and 2014 the economy picked up by an

average of 3.5% and by 2013 the growth rate (7.3 %). [National Institute of Statistics of

Cambodia]

The cost of food in Cambodia increased 5.30 percent in June of 2014 over the same month in

the previous year. Food Inflation in Cambodia averaged 3.7 percent from 2009 until 2014,

reaching an all-time high of 11.50 percent in January of 2009 (during global crises) and a record

low of -6.70 percent in May of 2009. Food Inflation in Cambodia is reported by the National Institute of Statistics of Cambodia, but the inflation rate is only 1.57%.

The inflation rate has been relatively stable during the last six years with an average of 1.57%

but food inflation has increased from 5% to 5.30%, with a growth up to 11.5% in 2009. The

population living below the poverty line (income is $2.5 a day) was 60 % in 2012/2014, about

83 % of the population in Cambodia lives in rural areas with agriculture being their main

activity. In 2004, the agricultural sector in Cambodia increased around 4.3% to GDP (Gross

Domestic Product), of which subsistence farming accounted for 81% of GDP and total

employment in Cambodia, respectively. The sector has maintained a steady growth rate of 4%

to 5% to be a major accelerator of economic growth as government strategy plan to export

15,000 tons of rice by 2015. Despite the sector‘s contribution to the economy, its growth rate

is seen as insufficient to improve the livelihood of the rural people as the rural areas account

for around 83% of the 11 million people living below the poverty line [ADB Report]. In

2000/01, 83% of the population living in rural areas in Cambodia was below the basic needs

poverty line which earn only 0.93$ per day, compared to around 23% in urban areas. These

were some of the primary reasons for the poverty, the development of a national economic

growth and poverty reduction strategy initiated by the World Bank, ADB Bank, and IMF

(International Monetary Fund). Cambodia enjoys political stability though the physical

infrastructure and functioning executive, legislative, education, health, and juridical systems

are poorly developed. Recently, the government has policies and regulations in place to

maximize the utilization of domestic and international resources in a strategy to reduce poverty

and eliminate social problems in the country including corruption. According to the Agriculture

Sector Performance Profile report provided by the Cambodia government, the costs of

investigating and prosecuting cases could easily consume half of the country‘s budget, a factor

that slows down the country‘s strategic efforts on poverty alleviation.

2. MARKET AND CLIENTS

2.1. Market According to MIO research and study of major microfinance and local banking, it is estimated

that there are close to six million small and micro entrepreneurs who need financial services,

and the number is growing by 4.5% percent annually, but still between 15 to 23% below

demand. This demand is mainly found in rural areas. This figure equals 28% of the country‘s

population, mainly dealing in the informal sector. At the beginning of their microfinance

activities, MIO is focusing on the urban informal sector. This sector contributes 43% of the

country GDP. Also it contributed 35% to the total urban labor force. Siem Reap is known as

popular resort town and gateway to the Angkor Wat region, the informal sector offers about

25% of the city's labor force, the rest work in the tourist industry. Nearly two of three urban

households own informal enterprises (as MIO reported 2015). MIO decided to boost informal

sector by providing financial services to their actors. Although there are contradicting views

regarding the relationship between poverty and the informal sector, without it, the poverty

situation of the affected families would have been much worse. At the beginning, MIO selected

four underprivileged target areas for their credit program to informal micro entrepreneurs. All

are situated in Siem Reap province, and provinces along national road No.6 this is including

the east side of the country. Furthermore, MIO is chiefly committed to empowering the

communities in rural areas because of the fact that their access to financial services is extremely

limited. The initial community to be reached during the pilot phase is Kompong Thom, 90 km

away from the MIO Head Quarter in Siem Reap City. For further detailed information

regarding demand, market penetration and opportunities, see Competition.

2.2. Microeconomic Background

Kompong Thom Province Stoueng Sen is one of eight districts of the Kompong Thom Municipal with an estimated total

population of 30,000 people. The province includes an estimated 908,398 people. The area of

Kompong Thom is 13,814 km² and is situated about 168km away from Phnom Penh-City,

where much of the commerce, banking and national offices are located. As well as a growing

tourist industry; Kampong Thom is also one of the largest producers of cashew nuts in

Cambodia [National Report], with 6,371 hectares under production in 2003–04. The Stoung

District is defined as an urban agriculture sector, with 75% of the population working in

agriculture. Typical small scale businesses include: street vendors and shop workers. The

majority of people only earn enough money to feed themselves that day. Although the poverty

rate is only the half of the country average, Stoung residents do not have savings for retirement,

medical expenses or life insurance. Agriculture activities are based on small and large scale

crop farming which means long hours for very small money. Earnings average a mere 70 USD

per month.

From Siem Reap, MIO will expand their business later to Kompong Thom City and area by

national road No.6 and Kompongcham, the forth area by the national road No.6 will be Banteay

Meanchey Province with an estimated population of 678,033. The towns of Poipet and

Sisophorn are in the western part of the province. There is also an international border

crossing into Thailand located along the National Road No.6 highway. The regions country

size is about 6,679 km2. This growing economy is reflected in a surplus of 15 % trans -

migration (Poipet Regional Commissioners Office). The total human population in the Banteay

Meanchey about 40% of the population is in the reproductive age (15-44 year old). Men age

between 35 and 45 are around 30% as women nearly 70%. Only 12% of the district population

is living in urban areas. The main industry of the labor force is agriculture (90%)

The major economic activity in Sereysophorn district is crop farming, employing 80% of the

total labor force. During non-farming season perhaps 20% of the local population migrates to

nearby Thailand for seasonal work. But much of the crop farming production is sold at a

reduced rate directly after harvest time because the local farmers do not have the finances to

pay workers and then wait until 3 months after the harvest when they could almost double their

returns. MIO will loan money to small crop farmers so that they can achieve a much better cash

return for their crops. Rice is the major food crop grown in the District. Sugarcane, coconut

and sesame are also major cash crops; rice is sold generally by the smallholders directly after

the three yearly harvests. Due to the rainfall seasons between November and May, half of the

crop selling farmers store crops for three to six months. There is a high variation of the price

within the region that indicates inefficiencies of the crop marketing system even though some

of the rice produced is exported to Thailand. For instance, the price for rice varies by 300 to

600 riel between Sereysophorn and the border District. Other occupations that employ a

significant number of the labor force include livestock traders, small businesses, street vendors,

professional jobs and other elementary occupations. Livestock traders mainly focus on chicken

ducks and cattle. The largest proportions of all livestock kept are ducks and chicken (23%),

followed by cattle (38%). Despite the fact that Sereysophorn is more than two times larger than

the average of the villages in Kralanh District, the distribution of occupation of the labor force

and the industry is comparable with the district figures. The Rural Rice Mill Development

Company [RRMDC] is engaged to boost organic cotton farming in the Mongkol Borei Region

and Battambong as mostly small community based companies. RRMDC is looking for

Microfinance Institutions (MFI) extending micro-credit schemes to small-holder farmers so

http://en.wikipedia.org/wiki/Poipet

that they can afford to purchase agricultural inputs and improve efficiency in marketing

agricultural produce to import or export. For that purpose, MIO will customize their loan

product program to meet the specific needs of agricultural small scale business. For instance,

a loan product with a grace period and weather insurance could be an appropriate option.

2.3. Clients

Our customer profile is based on survey results explored, ―a comprehensive national

household survey focused on the financial services needs and usage across the country. The

highlighted following characteristics of the potential microfinance clients: Population 63% of

the adult population is less than 34 years and 32% are between 15-18 years [National Report],

and mainly rural-based (81%). In addition, there are approximately 3.4 Million people under

16 years. Financial will access:

*Financial literacy. This is generally low and lower still for women and for people living in

rural areas. 95% of the population has heard of loans, but 75% do not understand how interest

rates work, or collateral, guarantors, opening an account etc.; 33% have never heard of a

savings account and some they don’t know at all. Beyond loans and savings, financial literacy

is close to nil (e.g. on insurance, retirement, Automatic Teller Machines) as recently

government put to all government office to us ATM for monthly wage, but some they don’t

know how to use it. Nevertheless, 80% of the total population indicated that they would like to

know how to open an account in a financial institution. This indicates a huge need for more as

well as better communication regarding financial services with the larger population and

widespread market.

*Sources of income Recent studies have shown that 30% of Cambodian people are

unemployed and huge numbers illegally emigrate to Thailand in search of work. Only 13% of

the population is employed in the formal sector. Most people make a living from agriculture,

either by selling food crops, cattle/livestock produce. Others run an informal small business

(25%), not [directly] related to agriculture. A large majority of people (72%) go without cash

income at times. Many (28%) depend on receiving financial help from close family.

*Use of credit and loan facilities Of those that borrow, most (38%) turn to family and friends,

23% borrow using collateral (e.g. livestock). Only 9% said that they have had a loan from a

bank ;as this is a big amount for them compared to income even some need those loan from the

bank, the only way they can do is small MFIs due to the bank not interest for small account

(ex: $25) MIO loan regulations are very stringent.

*Use of savings facilities Most people with money do not save it with a bank or financial

institution. Of those who save, three out of ten say they keep money in a secret hiding place

etc... in pillows, cabinets, in a box, or any secret area in the house (similar for urban and rural).

Another interesting aspect is that of the people with a bank account (9%), many save with or

borrow from informal providers or MFIs.

3. BUSINESS ENVIRONMENT ANALYSIS MIO microfinance intends to be a source of financial services for entrepreneurs and small

businesses lacking access to banking and related services. Microfinance is used to describe the supply

of financial services to low-income employees and to extend financial inclusion to poorer clients.

Microfinance is a way to promote economic development, employment and growth through the support

of micro-entrepreneurs and small businesses. MIO intends to extend its small loan capacity to help low

income workers achieve their goals in life. Loans can vary from $1500 USD to $250 USD depending

on the individuals wants and needs. MIO’s objective is to satisfy the unmet demand for small loans on

a much larger scale, and to play a role in reducing poverty.

3.1. Competitors The deregulation of the financial sector (in 1995) resulted in the privatization of the Commerce

Bank Plc and the Cooperative of MFI, which were the dominant providers of rural finance.

These institutions decreased their participation in rural finance during the economic growth

period of 2003. Several private banks were established but the majority of them operated only

in urban areas and main cities. In 2002-2006, only 5% of the rural population had access to

bank services. Although some commercial banks aim to offer micro-credit to micro-clients,

from January 2003, they allocated only 0.5 % of loans to small scale farmers. Access to credit

seems to be a problem that equally affects rural farmers in all regions of Cambodia as the bank

tends to select only above average earners. As indicated by Commercial Banking in 2004 more

than 63% of the rural households faced difficulties in accessing seasonal credits for purchasing

agricultural inputs as well as the complicated process of securing a bank loan .Small loans of

around $25 are of no interest to big banks. The extension of institutional finance to rural areas

has been included among developmental initiatives taken by the government and the

development agencies to eliminate poverty. This includes some development programs of

NGOs. Since the deregulation of the financial sector of 2005, there has been an increasing

number of MFIs. In 2005, there were about 8 MFIs, and as 70 % of them are from rural areas,

only 2 % of the rural population has access to their services. The limited capacities of MFI‘s

are among the reasons why they have not managed to solve the problem of credit inaccessibility

in rural areas. The majority of the rural population still depends on informal sources of financial

services, which are sometimes not reliable enough to make a significant impact on income

improvement and asset accumulation. A summary of all relevant MFIs in Cambodia was

provided by government and approved by Ministry of National Bank of Cambodia [NBC]. As

well as the most influential NGOs there are also some minor institutions known as community

based organizations operating throughout the country. In Siem Reap the indicated total

estimated demand for microloans is about 10 thousand million riel; the total Credit Operators

equals around 13 institutions. Commercial banks and Community banks together share only

customers living in City and urbanites, while many NGOs which accounted for 2,200

customers were forced to close by the government along with many much more minor social

organizations with limited resources for their microfinance activities. The largest single player

in the NGO category with a market share of 15% , which is mainly due to commercial and

trade customers as classified by Investment Bank. This information is supported by the Bank

of Cambodia‘s records. There are about 20% mainly rural based population in the whole

country serving an estimated client population of about 130,000, most of whom are savers. It

is important to note that cooperative institutions in Cambodia have had a very bad history as

most were associated with financial mismanagement to the extent that they lost peoples trust

and confidence. The cooperative based financial institutions therefore could not make any

meaningful impact in the lives of their members as they operated at very small scale due to

funding constraints‖. Some improvements have occurred since the government implemented a

special program to resuscitate the cooperative based financial institutions‖ (2015). It will take

time however, before significant impact becomes apparent. Other suspicious providers of

financial solutions to the poor are moneylenders. According to the NBC study, 10% of the

Cambodian adult population has access only to informal financial services. Some studies have

emphasized the need to consider the use and the amount of credit offered to the clients when

evaluating the impact of the MFIs on poverty reduction. It was found that the higher the amount

of a loan or the frequency of borrowing, the higher the labor productivity and the household

welfare of the recipients. However, the amount of credit, which for the case of the MFIs

increases with the frequency of borrowing, may not necessarily lead to poverty reduction. This

is so because some poor borrowers continue borrowing from MFIs to repay loans from

moneylenders, and hence are trapped into the [debt vicious cycle] (MIO Research). This is an

indication of increased vulnerability and poverty. Microfinance Institutions in Cambodia with

a special focus on Commercial Bank and a few Community/regional banks. MIO plan ahead

to train an business consultants to act as credit agents to boost our relationship with customers

and the informal sector.

Microfinance Institutions in Cambodia

Bank MFIs NGOs Community

Moneylender

Total

35 25 165 are operating

as moneylenders

no report 225

*** This figure includes all NGOs operating as moneylenders who will be closed by the government in

2016 due to stricter government regulations on micro finance.***

3.2.Opportunities and Threats

Siem Reap The city has fewer MFIs than the average number per region in a whole country.

The Cambodian economy has grown from 6.29 billion $ to 15.25 billion in the last 7 years

[2006-2015]; signs of this growth are the reasons behind the startup of MIO plan. The

designated target areas around Siem Reap are remarkably unrepresented. In total, there are

17 MFIs in the district serving around 40% clients. The total demand of the adult population

who have no access to financial services is 23 % out of the regions adult population of 1.6

million people, according to the MIO research of people living in Siem Reap, and the other

three target areas of the adult population do not have any access to financial services in the

local bank even yearly demanded around 4000 million riel of the lowest and under average

level needs. The remaining of people who have access to financial institutions are served by

13% MFIs and NGOs as well as of few commercial Banks who are involved in the

microfinance business. Acleda bank has a large market share and branches are located in

every district in Cambodia, many being in the populated Siem Reap City. Based on these

facts, the estimated demand of micro-entrepreneurs who are currently out of the scope of

reliable financial institutions is at least 10,000. They represent the most vulnerable and poor

people in the target areas that will not be considered by Acleda because of insufficient

collateral. Initially using the Credit Operator model of choice microfinance, MIO strengths

are serving the most vulnerable and poor people who cannot secure loans from financial

institutions.

Apart from being excluded from the formal financial sector, the limited number of

commercial banks in Siem Reap might result in a limited amount of money available to lend

in this district. To avoid these struggles, MIO needs sufficient capital to extend their business.

The main issues serving financial demand in the rural areas are poor infrastructure and low

population density. Market access for small scale farmers and small traders is given in both

directions. The branch will be open in all municipalities which require financial services.

Located in the regional capital, MIO will be able to replicate their lending program to other

rural areas. Out of the 4,000 people, who have no access to financial institutions, the demand

for microcredit is estimated at 1,200 micro-entrepreneurs. MIO expects to lend to more than

80 % of these smallholders within two years, from 2015 to 2017. After that, MIO intends to

replicate their program to other wards as commercial bank after five years.

4. CORROBORATION AND PARTNERSHIP

4.1. Global Network

Global Advisory Boards (GAB) Shaping a vision is an ongoing effort, necessitating the

oversight of the MIO Global Advisory Board. In her role as the chair of MIO Global Advisory

Board, Miss Mihoko Onozawa works in collaboration with co-chairpersons in each individual

country who coordinate the linkage of international business with a Japanese international

company, and institutions in their respective countries, currently Philippines, Indonesia,

Singapore, Spain and the Netherlands. Mr.Sokun Chan Dara works in collaboration with co-

chairperson and in post management in business administration for local and international

company, and founder of the established MIO program and MIO Mega Groups.

4.2. Cooperating Partnerships

MIO relies on a wide-ranging web of partners across the globe who are committed to a

common purpose and are willing to invest resources, money, time and talent - to ensure its

success. MIO core vision is to open the door for all Cambodians to have access to micro

finance. MIO is joining the efforts of the Cambodian local and central government, especially

with the department of Poverty Eradication and Economic Growth, to serve grassroots people

specifically, by helping to implement the policies so that we serve the interests of the citizens

and underprivileged areas in line with our government’s vision. MIO is the implementing

agency responsible for coordinating and monitoring the flow of funds on behalf of MIO

donors. The other relevant government ministries will ensure that the people of Cambodia are

served according to the vision and agenda of the Cambodia government that provides

professional development investment services. MIO’s aim is to mediate social investments in

low-income regions around the world, with a goal of alleviating poverty. MIO aims to become

the leading social business agency in Cambodia. In the effort to avoid duplication of services,

and to acknowledge the need for a multi-dimensioned approach to achieve success, MIO

continues to build relationships with existing national and international organizations and bi-

lateral development donors. Also, financial institutions in the country, specifically the

Cambodia Investment Bank Groups, and Self Project. have shown great interest in MIO‘s

programming.

4.3. Regulatory Policies

The following regulatory policies play an important part in shaping MIO‘s institutional

environment: The National Bank of Cambodia Policy (NBC), enacted by the government in

1996 and incorporated in the Banking and Financial Institutions Act 1999, aims to enable the

increasing microfinance industry to become more sustainable and reliable. With this policy,

the government was relieved of its responsibility as the key player in delivering financial

solutions to the poor. Since then the formal private sector has been the main provider of

microfinance services. Government ruling ensures that companies apply these financial

principles in running their businesses. Beside to the NBC following other policies are in place.

The National Strategy for Growth and Reduction of Poverty. These strategies are executed

by the department of Poverty Reduction and Economic Growth with corporate local and

international NGOs. Their targets are as followed:

Increasing economic growth

Reduction of income poverty

Improving the quality of life

Social well-being

Strengthening governance and accountability

Small and Medium Enterprises Development Policy

Ministry of Industry and Trade

4.4. Transformation into a Microfinance Company (MFI)

The institution is considering formalization when it passes the capital requirement from board

of traders. The board evaluates the opportunities and risks associated with the different

options available; in the hope of attracting a significant flow of client savings and domestic

and international debt and equity funds, MIO is considering changing their legal status to that

of a formally licensed financial intermediary in year 2021, initially with one branch and

progressing to two in the future. The Financial Committee, which works under the governing

board, evaluates the costs that are likely to result in the context of banking regulatory

structure. The Financial Committee will incur both up-front and ongoing costs, and these

costs are likely to be substantial. The evaluation will entail costly feasibility studies of the

alternatives and extensive consultations with lawyers and accountants. Registering as a

formal financial institution involves legal and filing fees. Once MIO attains a formal status,

the regulations governing the licensed financial intermediaries will lead to greater

professionalization, for example, through conformity to more rigorous standards of

provisioning and asset valuation. Regulations may also impose significant constraints,

restricting the hours and days of operation, requiring advance approval for opening new

branches, and setting requirements relating to the compensation, hiring, and termination of

employees. A microfinance institution that changes its status will generally face significant

additional supervisory requirements, such as an internal audit department and expanded

reporting. For that purpose, MIO is considering hiring an internal auditor and an additional

accountant in 2017. Significant capital reserve requirements are necessary, for example,

50,000.00 US dollars in the transformation year and 100,000.00 US dollars when MIO will

open other branch in Kompongthom under legal status. Most significantly, MIO operates as

a tax exempt nongovernmental organization but will lose that status and have to begin paying

taxes on its earnings when they become a formal limited institution.

5. INSTITUTIONAL ASSESSMENT

MIO is still in a startup phase and has no historical data to be assessed. The following

institutional capacity model is carried out of the market study and the environmental analysis.

It is a five year projection plan, considering the MIO milestone transforming to a microfinance

company in 2020, to be allowed to collect savings for the purpose of becoming self-sustained

at the end of the projected period.

5.1 Credit Policy

Context Clue

MIO was founded by Mr. Sokun Chan Dara and Miss Mihoko Onozawa, in order to contribute

to Cambodia and offer rural macro-economics to people of all levels. These loans can be

secured with both collateral and non-collateral. This key is existing adherent to the government

program for aiding family economic systems at all levels.

Production

MIO is encouraging the use of both currencies; Riel money KHR (Cambodian Money) and US

dollars ($). Both currencies will be offered as loans by MIO to produce a suitable product for

its market. Collateral and non-collateral backed loans will be offered and spread into the rural

and urban areas. Our aim is to enrich the local population by offering them financial alternatives

to normal banking services which they lack access to.

5.2 Unsecure Loan / None Collateral

Unsecure loan/non collateral is one of the product which more useful in market of a

developing country; these loans are popular for lowest income customers and can be either as

a personal loan or group loan.

*personal loan with non collateral was limited for family macro-entrepreneur:

-Maximum of loan from: 50 US dollars – 500 US dollars

-Loan requested over limited project: 50 US Dollars – 700 US Dollars

-Loan for: Person or family applications

-Re-payment method: Repayment of principle and interest rate (follow payment schedule)

-Re-pay Returning: Every two weeks or monthly

-Collaborative: Requesting person, collaborative in group borrower, and guarantor which

follow to MIO regulation of basic term and condition in loan process.

-Collateral Document: Original of identify cards, permanent staying pass book or/and other

document shall be valuable.

*Group Loan joins as group with limited amount for family business establishment

-Maximum of loan from: 50 US Dollars – 320 US Dollars


-Loan for: from 03 to 05 persons join as group





-Collateral Document: Original of identify cards, permanent staying pass book or/and other

document shall be valuable. [Note: Verification document from chief office or village office

are not acceptance]

5.3 Secure Loan / With Collateral

This commercial loan is formed to be safe and secure for medium amount with collateral,

there are two types of these loans..

*personal loan providing with collateral was limited for family macro-entrepreneur:



-Loan for: Person or family applications





-Collateral Document: Original of identify trust document such as hard/soft title of land or

house, and all requirement are acknowledged by local authorities, village, commune and

cadastral office of land management or/and other document shall be valuable.

*Group Loan joins as group with limited amount for family business establishment, the

evaluation of collateral is required the equal of loan disbursement cost as among of group

where the only one member is have right on collateral as other need to use this guide line as

subordinating in loan process. MIO will accept more for collateral material from grouping.



-Loan for: Grouping from 3 to 5 person




follow MIO’s regulations of basic term and conditions in the loan process.

-Collateral Document: Original of identify trust document such as hard/soft tittle of land or

house, and all requirement are acknowledged by local authorities, village, commune and

cadastral office of land management or/and other document shall be valuable.

5.4 Interest Rate

MIO was first acknowledged in running as Micro Credit Operator in whole of it market

channel, to capture of local market and flow to MIO action plane from 2015 to 2019. The

interest rates are set to suitable price even recently most of the bank form Hong Kong are firmly

to decline the interest rate. This way is destroying market not better way of economic of

competition. National Bank of Cambodia [NBC] is open door for this final year before credit

operator is going to develop itself to be Micro Finance. As reporting, if credit operator is run

the same rate of micro finance those companies who had this business will not survive or

compensate to admin fee such banking or tax. Finally, of MIO step out the products into every

part of country as following rate.

Unsecure Loan / None Collateral small commercial loan -Weekly 2% decline interest rate (principle and interest rate)

-Twice a month 4% decline interest rate (principle and interest rate)

- Monthly 8% decline interest rate (principle and interest rate)

Secure Loan / With Collateral medium commercial loan

-Weekly 1% decline interest rate (principle and interest rate)

-Twice a month 2% decline interest rate (principle and interest rate)

- Monthly 4 % decline interest rate (principle and interest rate)

The maximum loan period starts from 16 to 52 weeks. MIO is also offering emergency loans

and consignment partnerships with other companies; small or medium, or to families who

wanted to build a house or buy a small house. Cambodian is a poor country and the gross

domestic product [GDP] is $1200 to $2400 for one person and expectation in 2020 is $3000.

MIO is plan to meet the monthly return of re-payment between $25 up to $75; which afford

able to deduction to net profit of a Cambodian people not over 60% of 100% monthly in-come.

Calculation of decline interest rate

I = Interest Receivable

P = Principle

i% = Interest rate

n = Number of installment

𝐈 =𝑷 𝑿 𝒊% 𝑿 (𝒏+𝟏)

𝟐 MIO Board Director maintains the right to change the condition

6. Returning of Loan Re-payment

MIO re-payment methods are following both collateral and none collateral payments as

scheduled. The stringent rules of MIO’s evaluation are in place to ensure 100% loan recovery.

The study of income and expense evaluation or customer’s cash flow is instrumental in

securing a loan. Write off with penalty 50% will be subject between loan amounts 50 USD –

250 USD of final due principle amount; 25% subject of the amount 250 USD – 500 USD, and

10% between amounts 500 USD – 2500 USD. This admin cost is subjected to the write off

before schedule time and period. MIO Board Management will alternatively change or update

this process.

6.1 Re-Disbursement Loan

MIO stringently examines and evaluates new loan for customers, such as livestock or business

expansion. MIO regulates at least 70% returning; recovering of loan will be considered and

decisions made by considerable analysis. The background and history also be considered before

new loans are made available.

6.2 Penalty & Late Re-payment

In the case of late payments the following measures will be taken to recover the original loan.

Minor Default failure to repay or late repayment, or inadequate payment around 30 days are

counted as a minor default.

Major Default failure to re-pay or late re-pay, and paid inadequate pay over 30 days are

count into major default.

Penalty Late re-payment are notice into penalty 1% of principle interest rate due amount,

failure notice after 2 day in schedule is subjected to be late.

P = Penalty

R = Repayment in the period

i% = Interest rate

n = Number of day of re-payment

N = Number of day of an installment

𝐏 =(𝑹 𝑿 𝒊% 𝑿 𝐧)

𝑵 Board director maintains right to change the formula

Cancellation of Penalty Branch manager of MIO is allowed to report any cancellation on penalty

regarding late repayment with proof from chief credit officer and credit agent with document

support.

6.3 Customer Evaluation

The evaluating of MIO is still in a startup phase and has no historical data to be assessed. The

following institutional capacity model is carried out of the market study and the environmental

analysis. The condition of the customer to receive loan from MIO must have the permanent

address in Cambodia; age from 18 years old to 60 years old and under the following condition:

*Good character, behavior and good name in local area

*Ensure to provide all information to MIO with true and completed

*Not involvement with any illegal act or crime

*Clearance of occupation or business in local where MIO operating

*No plan to move or change the house *Condition is under 5Cs formula

Character MIO credit agent with observe and study on information and background for each

customer, behavior, intention of re-payment on debt, local social connection with chief village or

chief commune.

Capital Evaluating on source of financing, business, capacities, and source in-come earnings that

is the data to analyze of what the customer is going to use loan for?.

Cash flow/Capacity Customer evaluation on cash flow process from their occupation every day,

weekly, monthly or term as the flexibilities of truth and completed information to measure the

demanding of loan recovery in period of time and abilities to repayment.

Collateral Evaluating This is the direct inspection on site seeing, and observe as REALTOR:

- Right collateral and trust document from local authorities

- Estimated the value of collateral on site and area as market price

- Abilities to sell collateral

- Location of collateral

- Type of collateral

- Ownership of collateral

- Risk of collateral

Condition The verification on customer focusing about source of income and risk managing, risk

of market, risk of financing, risk of collateral, risk on occupation, which easily effect on returning

as scheduled. These 5Cs formula is formed to find out the strong point and weak point to evaluate

the debt resolution and returning on time. MIO keep and maintain good conditions with partners

and customers on evaluation of properties and source income to avoid double loan disburse with

other organization or bank.

MIO CREDIT OPERATOR INSTITUTION

rrÂss

Customer Group Evaluation Form

Customer address Village....................commune..........................district................city/province.............. ... I. Customer information 1. Group Leader (Account No. ................................................CID.....................................)

Collateral Properties Type I Type II Type III Land/House type Period of Holding Equity ..year from Legacy bought ..year from Wall & Roof Size M x M = M2 M x M = M2 M x M = M2 Land size M x M = M2 M x M = M2 M x M = M2 Title Holding Equity Type ............................................... ............................................ ........................................... Collateral status ……………………………………… ……………………………… ………………………………… Price Capacity Repayment (2 weeks monthly) Occupation Amount In-come of part (A) In-come of part (B) Expense in occupation (C) Net profit from occupation (D) =(A+B)-(C) Cap. Repay = [net profit(only in-come which affordable to re-pay)/Term of payment (weekly,2weeks, monthly)]x100 =(....................../.....................)x100=........................... > 160% (not provide) < 160% (provide)

2. Group members information ៖ (Account No.................................................CID :.............................) Collateral Properties Type I Type II Type III Land/House type Period of Holding Equity ..year from Legacy bought Wall & Roof Size M x M = M2 M x M = M2 M x M = M2 Land size M x M = M2 M x M = M2 M x M = M2 Title Holding Equity Type ............................................... ............................................ ........................................... Collateral status ……………………………………… ……………………………… ………………………………… Price Capacity Repayment (2 weeks monthly) Occupation Amount In-come of part (A) In-come of part (B) Expense in occupation (C) Net profit from occupation (D) =(A+B)-(C) Cap. Repay = [net profit(only in-come which affordable to re-pay)/Term of payment (weekly,2weeks, monthly)]x100 =(....................../.....................)x100=........................... > 160% (not provide) < 160% (provide)

3. Group members information ៖ (Account No.................................................CID :.............................) Collateral Properties Type I Type II Type III Land/House type Period of Holding Equity ..year from Legacy bought ..year

Loan Circle........................................

Wall & Roof Size M x M = M2 M x M = M2 M x M = M2 Land size M x M = M2 M x M = M2 M x M = M2 Title Holding Equity Type ............................................... ............................................ ........................................... Collateral status ……………………………………… ………………………………… ………………………………… Price Capacity Repayment (2 weeks monthly) Occupation Amount In-come of part (A) In-come of part (B) Expense in occupation (C) Net profit from occupation (D) =(A+B)-(C) Cap. Repay = [net profit(only in-come which affordable to re-pay)/Term of payment (weekly,2weeks, monthly)]x100 =(....................../.....................)x100=........................... > 160% (not provide) < 160% (provide)

4. Group members information ៖ (Account No.................................................CID :.............................) Collateral Properties Type I Type II Type III Land/House type Period of Holding Equity ..year from Legacy bought Wall & Roof Size M x M = M2 M x M = M2 M x M = M2 Land size M x M = M2 M x M = M2 M x M = M2 Title Holding Equity Type ............................................... ............................................ ........................................... Collateral status ……………………………………… ……………………………… ………………………………… Price Capacity Repayment (2 weeks monthly) Occupation Amount In-come of part (A) In-come of part (B) Expense in occupation (C) Net profit from occupation (D) =(A+B)-(C) Cap. Repay = [net profit(only in-come which affordable to re-pay)/Term of payment (weekly,2weeks, monthly)]x100 =(....................../.....................)x100=........................... > 160% (not provide) < 160% (provide)

5. Group members information ៖ (Account No.................................................CID :.............................) Collateral Properties Type I Type II Type III Land/House type

Period of Holding Equity ..year from Legacy bought

Wall & Roof Size M x M = M2 M x M = M2 M x M = M2 Land size M x M = M2 M x M = M2 M x M = M2 Title Holding Equity Type ............................................... .............................................. ......................................... Collateral status ……………………………………… ……………………………………… ……………………………… Price Capacity Repayment (2 weeks monthly) Occupation Amount In-come of part (A) In-come of part (B) Expense in occupation (C) Net profit from occupation (D) =(A+B)-(C) Cap. Repay = [net profit(only in-come which affordable to re-pay)/Term of payment (weekly,2weeks, monthly)]x100

=(....................../.....................)x100=........................... > 160% (not provide) < 160% (provide)

II. Suggestion of evaluation officer BM recommendation , CCO recommendation

....................................................................................................................................

........................................................

.................Date>>>>>>>>>>>>M>>>>>>>>>>>>>Y>>>>>>>>>>>>>>>>>>

Signature

Name>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Credit Agent Suggestion ...............................................................................................................

............................................... .................Date>>>>>>>>>>>>M>>>>>>>>>>>>>Y>>>>>>>>>>>>>>>>>>

Signature

Name>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

6.4 Risk of Loan

The MIO overview is to encourage the lowest and average living standard to the market as MIO

standards differ from normal bank lending services. Loan qualities are measured by risk of loan

(%PAR) and percentage of loan returning.

𝑃𝐴𝑅 (%) =𝐹𝑎𝑖𝑙𝑢𝑟𝑒 𝑡𝑜 𝑟𝑒𝑝𝑎𝑦 𝑙𝑜𝑎𝑛𝑠 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 (𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒)

𝑇𝑜𝑡𝑎𝑙 𝑂𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 (𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒)𝑋 100

Setting standards for assessing the quality of the following

- PAR 1% : The process is well done

- PAR 1% to 2% : The process is good

- PAR 2% to 3% : The process is average

- PAR 3% to 5% : The process need to be established

- PAR over 5% : The process is fail need to be planed immediately for recovering

Repayment Returning failure of scheduled loan returns as contracted are measured by the

following method:

𝑅𝑒𝑡𝑢𝑟𝑛𝑖𝑛𝑔 =𝑇𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑙𝑜𝑎𝑛 𝑟𝑒𝑡𝑢𝑟𝑛𝑒𝑑

𝑇𝑜𝑡𝑎𝑙 𝑙𝑜𝑎𝑛 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔𝑋 100

7. CREDIT AND SAVINGS PROGRAM

Defining MIO’s Financial Products

At the end of 2018, MIO started a pilot program and offered a single loan product, Solidarity

Small Business Loan, and had no voluntary savings products. The institution required all

borrowers to maintain monthly compulsory savings, which is treated as part of the loan

product. According to the pilot results, MIO intends to follow up with this loan type but plans

to introduce new loan product in year four when they extend their business to Battambang

province. The product should be customized based on the needs of agricultural small scale

businesses. Because of the late introduction and the very low financial impact, it is not

designed as an individual product in the existent business plan. MIO intends to convert to a

nonbank financial institution in year three, which will make it eligible to collect savings

deposits. Its management expects to offer two voluntary savings products: a voluntary savings

account, called ―Passbook Savings that replaces the current compulsory savings, and a range

of term deposits to be modeled as a single product called ―Fixed Deposits.

Setting MIO’s Loan Amounts and Repayment Conditions

At the beginning of 2019, MIO will offer a single loan product whole countrywide

throughout Cambodia. Clients are required to form groups of five, and each client will receive

a loan amount based on their need. In accordance with the Cambodian Bank model, MIO

decided not to require group guarantees. That means that no group member will cosign for

the others. All loans require biweekly payments. MIO will not offer a grace period on

repayments. Contractual loan terms varied between 8 and 12 months, it is projected that in

general clients took an extra month to fully repay their loans. Average loan amounts are

expected to increase annually by the rate of inflation. Initial annual client retention rate is to

be estimated at 60%, and will increase gradually up to 85% from year three to five.

Defining MIO’s Compulsory Savings Requirements

MIO require clients to save 20 % of their requested loan amount before disbursement. The

primarily purpose of compulsory savings is to cover any default risk. These savings will be

held at the Foreign Trade Bank (FTB). Because of the fact that MIO didn‘t pass the capital

requirement from the National Bank of Cambodia as of yet, the company is not legally

allowed to hold savings deposits. When MIO converts to a nonbank financial institution in

the third year of its strategic plan, it intends to eliminate the compulsory savings requirement.

In month 28, MIO will replace compulsory savings with their voluntary Passbook Savings

product and their Fixed Deposits.

Setting MIO’s Pricing Structure

MIO charges 30% annual interest using flat balance calculations. MIO also charges an upfront

commission fee of 1% on all loans at the time of disbursement, compared to the disbursement

MIO will charge as well as insurance fee which limited by board management and board

community and all will be accomplishment to loan size. All lending has been transacted in

local currency, with no indexing to external values. The management decided to take a lower

interest rate than the market average, which would attract more customers at the beginning

and is in accordance to the Poverty Reduction Strategy of the Cambodian government. If the

profitability projections turn out to be unacceptable, it will re-price the loan product again.

Setting the General Parameters for MIO’s Compulsory Savings Products

The compulsory savings pay the depositors interest at 10% annually. The clients do not have

an individual saving account. MIO collects the savings from their clients and deposits it as

accumulated amount on their business account at the FTB Bank. MIO pays out the interest

(minus a commission of 2%) when the loan is fully repaid or in year three when their clients

open voluntary saving accounts. Access to the compulsory savings is blocked while the client

has an outstanding loan and can be seized by MIO if the client fails to repay the loan. The

funds are not otherwise available for MIO‘s use.

Defining MIOs Voluntary Savings Products

Starting in year three, MIO plans to begin offering two voluntary savings products. Passbook

Savings will pay interest ranging between 2% to 6%, depending on the deposit amount, with

an average rate expected to be at 4%. Fixed Deposits will pay interest ranging between 7%

and 10%, depending on the term of annually set, with the average rate expected to be 8%.

These prices are above the current market rates. MIO decided that a specific percentage rate

of any savings deposits be placed in short-term reserve deposits, to handle ongoing depositors

withdrawing, with the rest available for on-lending at the institution‘s discretion. MIO‘s

management expects to establish a reserve of 40% of Passbook Savings and 25 % of Fixed

Deposits.

7.1. MIO’s Marketing Channel

MIO’s Initial Balances

MIO projects that it will have 9000 active clients at the end of 2017, all with Solidarity Small

Business Loans. Referencing MIO‘s balance sheet, it is determined that MIO will have a

gross outstanding balance for its single loan product of 1,500,000 US Dollars at the beginning

of the five-year projection.

Projecting MIO’s Active Loans

MIO‘s market study showed that the institution has the potential to grow from 300 to 9,000

clients in the current market area in Cambodia by the end of its five-year plan. In addition,

MIO intends to open branch office, in other provinces, in November of 2015. This branch is

expected to expand to 1,500 clients in each branch by the end of 2017, bringing the total

number of clients to 10,000. The projection models multiple branches using a consolidated

approach. It had chosen to project credit activity by the number of active clients rather than

by the number of new clients each month to calculate a reasonable cycle time for each

segment.

MIO’s Projected Number of Active Loans (2010 - 2014)

Branch Initial 2016 2017 2018 Siem Reap Head Office 500 1500 2000 2500

Kompong Thom 250 1300 1700 2000

Kompong Cham 0 1500 1700 2000

Battambong 0 1500 1700 2000

Prey Veng 0 1200 1500 2000

Kandal 0 1200 1700 2000

Phnom Penh 0 1500 2000 2500

Svay Rieng 0 1500 2000 2500

Total 750 11,200 14,300 17,500

MIO Staff to handle Operation

No

Province

Credit Agent

Chief Credit Agent

Teller

Admin

BM

Security

Cleaner

1 Siem Reap 12 2 2 1 1 1 1

2 Kompong Thom 10 2 2 1 1 1 1

3 Kompong Cham 12 2 2 1 1 1 1

4 Battambong 13 2 2 1 1 1 1

5 Prey Veng 10 2 2 1 1 1 1

6 Kandal 10 2 2 1 1 1 1

7 Phnom Penh 24 4 6 4 2 4 2

MIO’s Projected Term Loan Portfolio

MIO Project Income

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000Capital

Siem Reap Kompong Thom Kompong Cham Battambong

Prey Veng Svay Rieng Phnom Peng Kandal

Capital

Expected Net In-come0

1,000,000

1/1

/20

16

3/1

/20

16

5/1

/20

16

7/1

/20

16

9/1

/20

16

11/1/20…

1/1

/20

17

3/1

/20

17

5/1

/20

17

7/1

/20

17

9/1

/20

17

11/1/20…

1/1

/20

18

Expect Net In-come

Capital Expected Net In-come

Analyzing MIO’s Customer Retention Rates

Confident that the Cambodia Bank model and the special trained staff will address their

clients ‘needs, MIO‘s management expects a relatively high customer retention rate from

80% up to 90%. The management reviewed their loan-demand projections. They saw that

MIO will need to attract about 15,000 new clients in the next five years to reach its expansion

targets, and that only 3,000 of these clients will drop out during the five years. Therefore,

high client retention will need to be a primary goal in the coming years.

Projecting MIO’s Compulsory and Voluntary Savings

At the end of 2017, MIO‘s borrowers would have 1,000,000 US Dollars of compulsory

savings on deposit at NBC- an amount projected to grow to 56,250 USD by the end of year

two. When MIO begins offering voluntary savings in their branch in Battambong in the first

quarter of year three, management estimates that 60% of borrowers will transfer a significant

portion of their compulsory savings to the new voluntary savings accounts, either to a

passbook or to a deposit saving account. For the passbook saving account, management

estimates an initial average balance of 10,000 USD that will grow to about 750 USD at the

end of year five. The same applies to the Term Deposit. The initial average balance is

estimated significantly higher and accounts for 70 USD increasing to 118 USD at the end of

year five. The number of savers is predicted to be significantly lower. This is because of the

fact that customers take time to save sufficient capital reaching the minimum deposit

requirements of a Fixed Deposit account. In addition, the savers will have limited access to

their capital for an agreed time period. As client confidence and awareness increase, the

percentage of borrowers with voluntary savings is projected to increase up to 85% in year

five. In addition, MIO expects non-borrowers to open Passbook Savings and Term Deposits

accounts, starting in year three as well. For Passbook Savings, MIO estimates 90 new

accounts a month during the first half of year three and then a 5% monthly increase in

accounts from the beginning of the second half of the year until the end of the five year plan.

For Term Deposits, the initial number of savers is estimated at 10% of the borrowers in year

three, increasing slightly with 1% in year four and 2% in year five.

7.2. Board and Management

MIO embraces the organizational leadership model with a leadership team capable of formulating

and shaping a coherent vision combined with a management team skilled in implementing and

rejuvenating the vision over time. This team is comprised of a Chief Executive Officer working

closely with Governing Board chair, Advisory Board chairs, advisors and members committed to

constructing and executing the strategies. The Managers are responsible for the implementation

and management of the vision, specifically in the areas of microfinance, education, social

business, research, and entrepreneurial education. The management of the corporation is vested

in the Governing Board.

Governing Board

Board members are nominated and appointed for staggered terms of three years. Board members

serve a maximum of three successive terms; initial terms would be for three, six, on nine years.

A full board meeting would occur annually in the month of every month supplemented by

quarterly conference call meetings. Every year the annual board meetings take place in Siem

Reap. The board members represent groups deemed critical to managing a micro‐finance

organization, banking, legal, accounting, education, pastoral, business, organizational

development, government, financial planning, and women are well represented on the board.

Three members come from Head Office, in which one of them represents MFI clients of the MIO.

The Board delegates responsibilities for day-to-day operations to the corporation‘s Chief

Executive Officer and Executive Director and Committees. The board receives no compensation

other than reasonable expenses.

Founders

Ms. Mihoko Onozawa is the Founder and Executive Director of MIO. Born and raised in Europe,

she has worked in Italy, Spain, and Asian countries. Most recently, Ms. Mihoko Onozawa formed

and operated All Nations, a program serving the spiritual, economic and social needs of a

culturally, racially, and economically diverse community, particularly investment. At the same

time, Ms. Mihoko Onozawa served as strategic planner, and leadership trainer. Her experience in

Indonesia, Philippines, Thailand and South India are crucial to help MIO attain its goals.

Mr. Sokun Chan Dara, Chief Executive Officer and founder of MIO program obtained his degree

from PUC [Pannasastra University of Cambodia], where he devoted much of his time to studying

the sociological patterns of bonding and bridging social capital. He holds two degrees in

international relations of communication from PUC University, Cambodia, also taking classes in

South East Asia [USEA], he has participated in strategic planning of General Management,

leadership development, and organizational management seminars and teaching. Chan Dara is the

Co-founder and President of MIO. He became internal audit manager in 2012 while working as a

professor in English Institute in Siem Reap. In addition to his teaching experience, Chan Dara has

worked in post hotel international management team, and international business runner, In 2015,

he found the project of credit operator and co-cooperate with Ms. Mihoko Onozawa. To pursue

post-graduate studies where he assumed a position in the development office in exchange for a

salary and free tuition Dara still continue in Finance and Banking study. During nearly 10 years

of working with international companies and organizations from Asia and Europe, Dara assisted

thousands of clients to reach satisfactory goals.

Co-Chair

Kiry Sokun is a Social Business and Microfinance Co-Founder. He has worked for 10 years in

varied executive functions for NGOs and consultancy for business literacy. His most recent

positions include a Credit and Risk Manager and Regional Manager. Kiry Sokun coordinates

MIO‘s Advisory Board. MengSeng Sok coordinates the vision of MIO in business development

program. Both of them are holding BBA degree from Build Bright University (BBU), and

currently pursuing a Master Degree in economics and finance. Kiry is a researcher on MIO’s

economics for Financial Research and Finance Department, and has been a researcher with the

Department of Finance in Cambodia. Saren Khek is Credit and Branch Manager for supporting

MIO head office and branch strategies. He has worked for CMK Bank and Sahakren Plc for 11

years in various management posts. His most recent experience is Branch development and social

training connection.

National Advisory Board Cambodia

The Board may create committees as needed, such as community Relations, Cultural Outreach,

Research and Publication. There are two outstanding Committees: Executive and Finance

Committee. The Governing Board appoints all Committee chairs who must be members of the

Board.

The Executive Committee

The Executive Committee reviews the performance of the Executive Office. Except for the power

to amend the Articles of Incorporation and Bylaws, the Executive Committee have all power and

authority of the Governing Board in the intervals between meetings of the Board of Directors,

subject to the directors and control of the Board of Directors. The Executive Director is

responsible for hiring and supervising. The Executive Committee shall serve as a vital committee

and is responsible for developing a personnel policy.

Finance Committee

The Treasurer is chair of Finance Committee, which include three other Board members. The

Finance Committee is responsible for fiscal control, development and reviewing expenditure

procedures, and a fundraising action plan and organization annual budget. The Board of Directors

must approve the budget and all expenditures must be within the budget. Any major change in the

budget must be approved by the Board of Directors or Executive Committee. The fiscal year shall

be the Calendar year. Quarterly reports are required to be submitted to the Governing Board

showing income, expenditure and pending income. The financial records of the Corporation are

public information and shall be made available to the Governing Board members and the public.

7.3. Institutional Resources and Capacity

Defining MIO’s Staffing Categories

MIO refers to members of its field staff as ―Loan Officers. The company opted for salary and

benefit adjustments at the beginning of each fiscal year, because MIO's board generally grants an

increase equal to the inflation rate. In addition to its loan officers, MIO considers its ―Credit

Supervisor, ―and Operations Manager part of the Branch-related staffing. All other existing staff

are considered Head Office staff. In November 2015, when another branch office is to be opened,

MIO will shift the operations manager or regional manager to the position of branch manager for

operation auditing to all process and regulation of the old branch. So the job title includes both

positions - "Operations Inspector/Branch Manager”. Starting in year three, when savings products

are introduced in Cambodia, that branch will add the following positions: ―Teller and ―Security

Guard. One year later, when a new branch is opened in Battambong, additional Tellers and

Security Guards will be hired. The Chief Credit Officer will also be hired in year four, when the

second branch is to be opened. His role is to empower the sales staff and to review the credit

decisions. A large branch like Siem Reap that will need more than 35 employees should be

supported by additional supervision functions. For administrative-level staffing, MIO entered the

following positions: ―Executive Director, ―Operation Manager, ―Chief Accountant, Assistant

Accountant, MIS Supervisor, ―Internal Auditor, Human Resource Manager, ―Saving Director,

―Secretary, and Driver. (For detailed job specifications see attachment).

Defining MIO’s Operational Expense Categories

For Branch-related operational expense categories, the staff specifies ―Rent, ―Utilities,

―Transportation, ―General Office Expenses, ―Staff Training, ―Borrower Training, and

―Repairs, Maintenance and Insurance. For Head Office operational expense categories they enter

―Rent, ―Utilities―Transportation, ―General Office Expenses,―Repairs, Maintenance, and

Insurance, ―Professional Fees and Consultants, ―Board Expenses, and ―Staff Training.

Projecting MIO’s Branch Resources and Capacity

Projecting MIO's Branch-related Loan Loss Provisioning MIO estimates that its portfolio, at risk

for more than 30 days, will be 5%. It projects write-offs of 2% of its portfolio and decided to use

this write-off rate for all future projections. The loan loss reserve is to be estimated by KHR

1,000,000.

Defining MIO’s Branches

MIO plans to open its first branch in KompongThom from 1st of November 2015, and indicates

that a second branch will open in the beginning of February 2016 in Kompong Cham.

Setting the Links for MIO’s Loan Officer Projections

MIO's lending methodology permits experienced field staff to work with a caseload of 150 clients.

Loan officers generally take 12 months to move up to the senior level and a full caseload.

Beginning staff generally work with 25% of a full caseload, secondary staff with 50%, and

intermediate staff with 75%. MIO generally hires new credit officers in groups of at least ten in

order to coordinate staff orientation and training. At the beginning, MIO will have 8 loan officers,

one of whom will have been with MIO for 12 months (i.e., senior level), and one which will be

newly hired. Projecting MIO’s Automated Branch-related Staffing Levels at the beginning, MIO

intends to start with ensure efficiency and to serve with a high grade of safety and quality, the

company planned to hire:

*One Chief Credit Officer for every 8 Credit Officers, starting after a total of 12 loan officers are

hired;

*One branch manager

*One Admin for each branch that opens

*One teller for every branch that offers voluntary savings

*One security guard for each branch that offers savings,

Staff Position Monthly Salary (Benefit are included)

Credit Officer Entry level USD 175 (Entry level)

Credit Officer Experience USD 215 (Passed probation)

Teller USD 150

Admin USD 150

Operation/Branch Manager USD 550

Security Officer USD 120

Cleaner USD 100

Starting in year three the cost for each position - including salaries, benefits and payroll taxes - as

of December 2015 is estimated in the following table. The model will automatically increase the

salaries by the inflation rate in the first month of each fiscal year.

Projecting MIO’s Branch-related Other Operational Expenses

To generate projections of MIO's Branch-related other operational expenses, the company

distinguished the Branch-expenses from administrative-expenses categories opting for automated

projections as they enter the following Links:

Category Expense Amount USD Inflation Adjustment

Rent USD 250 – USD 450 Monthly

Utilities USD 100 Monthly

Transportation USD 500 Monthly

General Office Expense USD 200 Monthly

Repairs, maintenance, insurance USD 50 Monthly

Staff Training USD 200 Monthly

MISC Expense (%) 8% other operational Monthly

Entering Initial Balances for MIO’s Branch-related Fixed Assets

MIO entered initial balance information for the following Branch-related fixed assets, as of the

end of 2015:

Asset Purchase Amount Remaining Life

3 computer USD 790 3

Assorted office furniture USD 470 3

Employee Grouping USD 300 12

Printer USD 175 1

Planning MIO’s Fixed Asset Acquisitions at the Branch Level

MIO decided to link each fixed asset category to a key output of the model in order to

automatically generate its fixed asset acquisition schedule. They estimate that a branch office

needs a computer for every four Branch staff. MIO plans to buy three computers for each branch.

MIO plans to purchase one set of general office furniture for each branch office. They linked

employee furniture groupings to the number of Branch staff, using a ratio of one unit of furniture

for each Branch staff person. For other assets categories they specify an―MIS system to be

introduced as part of MIO information controlling.

Projecting MIO’s Administrative Staffing Levels

At the beginning of 2018, MIO's administrative staff will consist of an executive director, a chief

accountant, a secretary and a driver. In addition, the institution plans to hire an MIS manager at

the beginning of year three to supervise the new management information system, a savings

director in the third quarter of year two to prepare for the new services to be offered in year three,

and a human resources manager at the beginning of year two to work with the growing number

of staff. Starting in the third quarter of year two, when MIO prepares to transform to Microfinance

Company, they will hire a general manager that will take over the executive responsibility for the

formal microfinance institution, and an Assistant Accountant. When MIO becomes a legal

Microfinance Company in year three, they will hire an internal auditor to ensure appropriate

controlling and reporting.

Projecting MIO’s Administrative Salary and Benefits Expenses

Just as for the Branch staff, the salaries of MIO's administrative staff is considered equal to market

rates. The staff estimated monthly salary and benefit costs for administrative staff are as follows:

Position Monthly Salary including benefit

Executive Director $2500

General Credit Manager $1800

Chief Account $1500

Internal Auditor $500

Assistant Account $350

MIS Assistant $700

Human Resource Manager $850

Regional Manager $1200

Business Development Manager (Audit Team) $1200

Projecting MIO’s Other Operational Expenses at the Administrative Level

MIO prepared the following budget estimates for other operational expenses at the administrative

level:

Category Expense Inflation Adjustment

Head Office Rental USD 450 Monthly

Utilities USD 800 Monthly

General office expenses USD 500 Monthly

Repairs, maintenance, insurance USD 500 Monthly

Professional fees, consultants USD 500 Annually

Board Expenses USD 600 Monthly

Staff Training USD 5/staff per month Monthly

Miscellaneous expenses (%) 5% of operational admin expense Monthly

Monthly

MIO’s Fixed Asset Acquisition Plan at the Administrative Level

To begin the fixed asset analysis at the administrative level, MIO entered the following

information about the institution's existing assets:

Asset Purchase Amount USD Remaining life /Year

Eight Computers USD 2340 2

One Assorted office furniture USD 1700 5

Accumulated depreciation, total USD (4040) 4

MIO budget for the purchase of five additional computers in months 18, 25, 31, 37 and 49,

whenever MIO expect to hire new administrative staff members (e.g. Human Resource Manager

is expected to be hired in the beginning of year two). They also budgeted for the purchase of

additional office furniture grouping in month 20, when administrative staff accounts for more

than five members. These purchases are in addition to the automatic replacement of fully

depreciated equipment that is projected by the model.

Analyzing MIO’s Land and Buildings

In 2018, MIO owned no land or buildings and had no plans to acquire any during the next five

years, all are under rental fee.

Analyzing MIO’s Other Assets

MIO's strategic plan identified an urgent need to upgrade the MIS system, and budgeted USD 30,

000 in month 30. The MIS is treated as an asset and amortized over a five year period.

Analyzing MIO’s In-kind Subsidies

Through independent stakeholders, MIO have to pay rent for their Head Quarter office during the

projected period. MIO estimates the value of this amount at USD 5400 for year one. With regards

to the inflation, the project it will increase in year five. MIO entered these figures initially as their

monthly equivalents of USD 460 a month for year one. While this rent subvention is not an actual

expense for MIO, it is factored into the financial profitability calculations.

7.4. Risk Management and Controlling

MIO identified following main risk categories: credit, liquidity, and operational Risks.

Credit Risk

Credit risk is defined as a potential loss that is indicated when a borrower fails to repay a loan.

MIO‘s risk prevention and collection strategy depend on the reason for the imminent default:

unwillingness or financial distress. Group lending methodology and up-front compulsory savings

will decline MIO‘s credit risk. Biweekly collection procedures and trainings are parts of an early

risk recognition system based on ongoing customer evaluation provided by the loan officers.

Different approval levels (group member – loan officer – branch manager –chief credit officer)

should ensure a high quality loan application process. A borrower who is in financial distress and

is willing to repay their loans will be transferred to a flexible loan. A flexible loan reduces the

installment size and extends the maturity depending on the customer payment ability. In 2019,

when MIO will be legalized as Microfinance Company, but an internal auditor will be hired to

implement a risk management system following the requirements and the national banking

regulators.

Liquidity Risk

Liquidity risk management will be done by the Finance Committee which ensures that funding

commitments and deposits withdrawal can be met on time. For that purpose, MIO has considered

a sufficient liquidity margin in their model.

Operational Risk

Operational risk is a main issue for a start up in finance with their limited resources. Employees

who are overloaded, undertrained or underpaid are the primary driving force behind errors, fraud

and mismanagement. MIO decided to serve and educate their employees from the beginning in a

competitive manner. This serves to increase their identification with the company. To ensure

proper operational procedures, reasonable controlling systems will be developed from the

beginning and will be managed by the Executive Committee. An operational margin is

implemented in the model to handle any operational losses and liquidity.

7.5. Financing Strategy

Identifying MIO’s Sources of Financing

Management prepared the following summary of MIO's financing sources. MIO has the following

grant commitments and pledges:

* Individual Investors from stakeholder pledged 600,000 USD for the first 18 months.

*SATHAPANA & MARUHAN Bank is an international cooperation enterprise for sustainable

development in South Asia operations. MARUHAN promotes complex reforms and change

processes, often working under difficult conditions. Its corporate objective is to improve people‘s

living conditions on a sustainable basis. MIO expect a grant of 300,000 USD for the first

corporation.

*ACLEDA Bank is a local bank which operated in South Asia country, Cambodia, Lao,

Myanmar, Acleda has a clear vision to contribute 200,000 USD.

MIO needs to receive portfolio restricted loans, and estimates for the third quarter in 2015 a initial

loan of about 10,100 USD at zero percent to expand their pilot program to 250 borrowers in Siem

Reap. It is reflected at the initial outstanding amount, at the beginning of the projection period.

MIO restricted the use of savings to loan portfolio financing. The management established a

liquidity margin for portfolio of 25% of monthly loan disbursements, and a liquidity margin for

operations of 31% of monthly cash expenses. MIO is expecting an initial market rate cost of funds

of 20%. This is a precaution estimate. Some commercial Banks in Cambodia offers lower interest

rates. This rate is expected to decrease down to 16% when the company becomes a formal

financial institution and has sufficient means in year three. MIO considers any interest rate that is

at least 85% of this value to be market rate.

Projecting MIO’s Financing Flows

Loans

MIO modeled the institution's financing strategy by entering all confirmed and likely financing

receipts and repayments. All loan payments are entered as negative numbers:

*Unidentified sources. The initial loan amount of KHM 10,100 USD that is needed to serve 250

clients in third quarter 2015 will be repaid in September 2016. A new fund of 150,000 USD with

a supposed maturity of one years is expected in February 2016 and entered in the model. MIO

will make monthly payments.

* MIO is scheduled to receive its first disbursement from Shareholder and partner after 2016, and

new funds are expected.

Funds

MIO anticipates experiencing a funding shortfall in the end of 2015. The following years also

show shortfalls, with the exception of year five. In addition to the indicated fund sources, MIO

management philosophy is to gain self-sufficiency within five years. For that purpose, the

management restricts the fundraising portion with a declining percentage of 100% in year one

down to 55%, in year two, 50% in year three and 30% in year four. In 2020, MIO does not expect

to require any more grants.

Equity

In year four, MIO plans to open a new branch in Phnom Penh. Under the National Microfinance

Policy, MIO is requested to raise capital amounting to 20,000,000 USD to become a nationwide

operating Microfinance Company. To increase their equity and to strengthen their customer

retention, MIO will introduce a compulsory membership model, where each new borrower will

pay 5 dollars with an annual distribution of dividends, starting in year three. Projection shows that

additional equity funding sources are needed.

Investment Strategy

MIO will not establish any long-term investments during the first five years. MIO will earn 2%

to 4% interest on cash deposits. It earns 5% on short-term investments, 7% on savings reserves

and would earn 10% on long-term investments if it had any. All rates are based on current market

rates. MIO will generate nearly 21,600,000 USD (round up) in investment income over the five-

year period.

7.6 Credit Policy Plan of MIO

1-Individual Loan None Collateral

Amount I.Rate

Weekly Monthly

Repay-Scheduled

Repay Gua. People

Collateral Sources

$50

to

$200

2%

16 – 42 W

4 – 10 M

P&I for 1 week

60%

Gua. or None

A- Family book, accom. book, ID Card

B- ID Card (Motorbike –Car)

C- Land-House License

4%

16 – 42 W

4 – 10 M

P&I 2 week

Agreement Form

8%

16 – 42 W

4 – 10 M

P&I Monthly

Family involved

$201

to

$250

2%

16 – 52 W

4 – 12 M

P&I for 1 week

60%

Gua. or None

Loan: $50 to $200 should follow:

1-Collateral 1 in item of A


2-Collateral 2 in item A1, B1, C1


3-Collateral 2 in item A2, B1, C1

4%

16 – 52 W

4 – 12 M

P&I 2 week

Agreement Form

8%

16 – 52 W

4 – 12 M

P&I Monthly

Family involved

$251

to

$500

2%

16 – 77 W

4 – 18 M

P&I for 1 week

60%

Gua. or None

4%

16 – 77 W

4 – 18 M

P&I 2 week

Agreement Form

8%

16 – 77 W

4 – 18 M

P&I Monthly

Family involved

2-Group loan none collateral: Team borrower from 3-5 persons (collateral depend on loan scale)

$50

2%

16 – 42 W

4 – 10 M

P&I for 1 week

Agreement family


to

$200

4%

16 – 42 W

4 – 10 M

P&I 2 week

60%

Guarantee people


C- Land-House License

8%

16 – 42 W

4 – 10 M

P&I Monthly

Gua. Co-Group

$201

to

$375

2%

16 – 77 W

4 – 18 M

P&I for 1 week

60%

Agreement family


4%

16 – 77 W

4 – 18 M

P&I 2 week

Guarantee people


8%

16 – 77 W

4 – 18 M

P&I Monthly

Gua. Co-Group

C-Trust house-land license

3-Individual loan with collateral

$51

to

$1000

1%

16 –104W

4 – 24 M

P&I for 1 week

60%

Guarantee with

agreement from

family members

A-Trust land-house license (Hard)

B-Trust land-house license (Soft)

All Collateral must be signed and

approved from Chief Village, and Chief

Commune law of house provincial.

***In case of customer have saving

account between 30% of loan requested

with MIO will be considered***

2%

16 –104W

4 – 24 M

P&I 2 week

4%

16 –104W

4 – 24 M

P&I Monthly

$1001

to

$2000

1%

16 –130W

4 – 30 M

P&I for 1 week

60%

Guarantee with

agreement from

family members

2%

16 –130W

4 – 30 M

P&I 2 week

4%

16 –130W

4 – 30 M

P&I Monthly

$2001

to

$3000

1%

16 –182W

4 – 42 M

P&I for 1 week

60%

Guarantee with

agreement from

family members

2%

16 –182W

4 – 42 M

P&I 2 week

4%

16 –182W

4 – 42 M

P&I Monthly

4-Group loan with collateral: Team borrower from 3-5 persons; collateral depend on the maximum of loan requested

$50

to

$200

1%

16 –77 W

4 – 18 M

P&I for 1 week

60%

Agreed all family

members

A-Trust land-house license (Hard)

B-Trust land-house license (Soft)

All Collateral must be signed and

approved from Chief Village, and Chief

Commune law of house provincial.

2%

16 –77 W

4 – 18 M

P&I 2 week

Guaranteed

people

4%

16 –77 W

4 – 18 M

P&I Monthly

Guaranteed

Co-Group

$201

1%

16 –104W

4 – 24 M

P&I for 1 week

Agreed all family

members

to

$1000

2%

16 –104W

4 – 24 M

P&I 2 week

60%

Guaranteed

people

***In case of customer have saving

account between 30% of loan requested

with MIO will be considered***

4%

16 –104W

4 – 24 M

P&I Monthly

Guaranteed

Co-Group

$1001

to

$2000

1%

16 –130W

4 – 30 M

P&I for 1 week

60%

Group to Group

guaranteed

Group to Group

guaranteed

2%

16 –130W

4 – 30 M

P&I 2 week

4%

16 –130W

4 – 30 M

P&I Monthly

8. FINANCIAL PROJECTIONS

Financial projection plan was made with a Microsoft Excel spreadsheet developed by co-chair of

MIO. The experience MIO team are extremely well serve to all level of highest, average, and

under average. All branches are subsidiary to head office for all financial needs and daily

demanding. The head office will delegate as daily operation requested, which show up the

numerous of requested and approved by financial manager. Future more, the daily observation of

local economic market are strict to report by MIO credit officers. The main key of this market

channel will be affect to daily exchange and daily interest rate in wide spread market if fail of

planning to dial beforehand.

C A P ITA L YEA R 1 YEA R 2 YEA R 3 YEA R 4 YEA R 5 LOC A TION

480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 S iem Reap

480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 Kampo ng Tho m

480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 Battambo ng

S um m a ry 480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 Kampo ng Cham

Output 480,000,000.00 480,000,000.00 480,000,000.00 480,000,000.00 P rey Veng

480,000,000.00 480,000,000.00 480,000,000.00 Kampo ng Chhnang

480,000,000.00 480,000,000.00 480,000,000.00 P hno m P hen

480,000,000.00 480,000,000.00 480,000,000.00 P hno m P hen

480,000,000.00 480,000,000.00 480,000,000.00 Kandal

TOTA L 9 6 0 ,0 0 0 ,0 0 0 .0 0 2 ,4 0 0 ,0 0 0 ,0 0 0 .0 0 4 ,3 2 0 ,0 0 0 ,0 0 0 .0 0 4 ,3 2 0 ,0 0 0 ,0 0 0 .0 0 4 ,3 2 0 ,0 0 0 ,0 0 0 .0 0

M IO C R ED IT OP ER A TOR IN S TITUTION

F IN A N C IA L P R OJ EC TION

9. Job Descriptions

Designation Duties Responsibilities Experience

Chief

Executive

Officer

1.General Management

*Human Resource Selection and development

-Data remote pushing way to operation to meet high quality of MIO subject

-Handle all operation and multi task of MIO vision and core value to achieve

MIO goal

-Set up all internal memorandum to meet expectation of target set down

-Develop branch and head office capacities and evaluate of all process key

points

-Conduct training and last minute meetings if required

-Staff monthly appraisal and monthly job delegation objective by department

head

-Branch observation to boost up abilities, accuracy, balance and cable to reach

business plan

-Active feedback of any issue with right decision of regulation, maintaining,

coordinating, adaptation for all processing.

-Manage people, motivating skill and comprehension on score analytical to

meet expect of yearly appraisal of MIO code ethic.

-Conduct human resource training and job training delegation task in manner

-Survey all weekly and monthly of MIO score work as monitoring all aspect in

whole process.

*Inventory Management

-Approving and adjusting to operation requested of demanding made by head

department and supervisory level.

- Review all inventory report in daily basic

-lease of new implementation on project need

*Marketing and Sale advisory

-Quoted new data and strategy set down on time and up to date of market

changing; and revolution.

-Delegate of product and approve of new product

-Set out budget plan and in-come statement for MIO achievement

-Develop product knowledge of packaging for branch office and head office

-Research and survey of competitor abilities and possibilities

-Market and daily economic analysis

-Observational of customer changing behavior and market change

-Delegate and report of region economic change

-Connectivity with NBC and authorities of new regulation updated and

government requirement

*Financial Management and Business auditing

-Check all transaction and report of bank transfer and branch demanding

-Approved and connecting with owner of financial process

-Audit and check all report from finance

-Advise and establish in case any leaking point is shown up

-Check all expense report and income report

-Push on MIO regulation set up

-Check and report to owner for DTD, MTD, YTD of finance report

-Cooperate with financial controller to monitor of stock demanding are in

progress

-Disburse observation and investigation

-Ensure all financial reporting are accurate, balance and complied with MIO

frame

*Analytical Report of MIO Risk and Profit

-Find out the key point to avoid of high risk

-Find out the profit of MIO frame to meet target

-Win market collection report

-Dating and observation of competitor product

-Specific of MIO spread into market

10 Years

Business

Development

Manager

*Overall assessment of overview MIO

-Planning organizational of MIO branch development

-Project of business awareness of new competition

-Establish baseline data that will be used as a basis

-Planning organizing also monitoring progress and measuring impact of new

project to MFIs and competitor

-Conduct training all type of MIO program and procedure

-Strengthening appraisal capacity of internal and external relevant

disaggregated data

7 Years

- Strengthening appraisal capacity technical of MFIs in assessing sustainable

lending to viable MSEs

-Improving and upgrade business skill of MSEs formal and informal

entrepreneurs

-Develop of a MIO sensitive business planning and management training

manual

-Observation and managing on performance result analysis and key point

-Update the market demanded and prepare new product as demand with

regional manager

-Data relationship from other department

-Marketing research on MIO product and competitor product

-Analytical skill on area and local economic situation

-Prevention of lost revenue found

*(1) Branch Development and business development

-Check to operational running and new branch processing data [entry and

disburse]

-Suggest and develop incase late red-payment and find out the main component

-Push on main key competencies for highest result of branch

-Set target for business regulation and daily, weekly, monthly performance

-Program coordinating with branch manager and employment survey on daily

performance

-Lease business regulation and assist branch manager to follow up company

procedure

-Observe when branch is low score result and barnstorming list as new target

recovery

-Immediate operate on any help as requested from branch province or internal

operation

-Assist on problem solving if needed

*(2) Internal Audit and research competitor on daily basic

-Audit on business or branch processing data

-Ensure all documentary are compiled MIO regulation and standard operation

as required

-Daily monitoring on management system report is well running and well

organized

-Cooperate with finance department to specific on main target set by MIO

-Daily check to all branch finance report

-Immediately feedback if any project are mail functioning on operation

-Collect all data feedback result for new key establishment project

-Work closely with internal audit for efficiency internal operation

*(3) Reporting skill on information collection

-Ensure all of MIO portfolio report to CEO and MD are up to date

-Manage and analysis of all financial processing report, income, expense, asset

....etc.

-Collect all information data from branch office and head office to ensure all

well check

-Critical thinking on daily report

-Ensure MIO level administrative are up to date with standard regulation

*(4) Marketing involvement and result clause

-Work closely with regional manager to multilink of marketing research

-develop and report of monthly yearly GDP to compare new guide line product

-Base line data analytical skill

-Win competitor program set as report receiving from regional manger

-Product knowledge and creative productivities for MIO

-Main tower decision of strategic management team and market player

-Forecasting daily decrease and increase of customer demanding, knowledge

and their need

-Yield management and marketing develop organizational set

-Credit Policy and credit limited establishment

-Coordinate and adjust of NBC requirement and MIO requirement

Regional

Manager

*Overall assessment of overview MIO

-Organizational executive of MIO branch development

-Project of business awareness of new competition

-Establish baseline data that will be used as a basis

-Planning organizing also monitoring progress and measuring impact of new

project to MFIs and competitor

-Conduct training all type of MIO program and procedure

-Strengthening appraisal capacity of internal and external relevant

disaggregated data

- Strengthening appraisal capacity technical of MFIs in assessing sustainable

lending to viable MSEs

-Improving and upgrade business skill of MSEs formal and informal

entrepreneurs

-Develop of a MIO sensitive business planning and management training

manual

-Observation and managing on performance result analysis and key point

-Update the market demanded and prepare new product as demand with board

manager team

-Data relationship from other department as researching expert

-Marketing research on MIO product and competitor product

-Analytical skill on area and local economic situation

-Prevention of lost revenue found

*(1) New Branch open door and development business

-Operational running and new branch processing data research [entry and

disburse]

-Suggest and develop the main component in accordance with chief credit

officer and branch manger

-Push on main key competencies for highest result of branch in case loan late

and solving problem

-Set target for business regulation by comparing other MFIs performance

-Program coordinating with branch manager and employment survey on daily

performance and learn from what customer feedback

-Lease business regulation and assist branch manager to follow up company

procedure by providing the data diagram from other competitor

-Push idea when branch is low score result and barnstorming list as new

immediate target recovery

-Immediate operate on any help as requested from branch province or internal

operation requirement

-Assist on problem solving if needed

*(2) Internal research and competitor research on daily basic

-Daily observation on business or branch processing data research

-Ensure all documentary are compiled MIO regulation and standard required of

NBC and local authority

-Daily monitoring on management system report is well running and well

organized as informed

-Cooperate with business development department to specific on main target

set by MIO

-Daily check to all branch finance report up and down

-Result expectation of product research from other MFIs by monthly and year

- Prepare secure and unsecure loan recovery report with credit officer and

agent, collaterals or possibilities urgent need of customers

8 Years

-Immediately feedback if any project are mail functioning on operation, idea to

restore the case

-Collect all data feedback result for new key establishment project

-Work closely with internal audit for efficiency internal operation and business

development team

*(3) Reporting skill on financial collection and local authorities connection

-Ensure all portfolio report or part of financial and productivities from other

MFIs is report to CEO and MD are up to date

-Manage and analysis of all financial processing report increasing disburse and

market demanding and needs ...

-Collect; manage all information data from branch office and head office to

ensure all well check

-Critical thinking on social network connection and authorities

-Ensure MIO level administrative are up to authority’s regulation demand

-Market collecting information and formula creative to win percentage

*(4) Marketing involvement

-Multilink of marketing research

-Observation of customer behavior changing and knowledge

-develop and report of monthly yearly GDP to compare new guide line product

-Base line data analytical skill

-Win competitor program set and sale score preparation with chief credit and

credit agent and branch manager

-Product knowledge and creative productivities for MIO and learn about other

product report

-Main tower decision of strategic management team and market team player

-Direct forecasting daily decrease and increase of customer demanding,

knowledge and their need in daily living standard

-Yield management and marketing develop organizational set

-Provided good connectivity with government and local authorities of customer

background research and region research

-To identify and evaluate best region and un-score region

-Defining target lowest, medium and highest

-Work with government people for determination of market size and location

including credit limited volume

-Financial planning of region and province

Finance

Manager

About the position: This position will form a key component of MIO Finance

Business support structure and will have direct responsibility of the finance

activities and performance.

*Oversight of MIO budgets:

- Ongoing analytical review to identify key trends

- Identifying process improvement opportunities and driving the

implementation of MIO plans

- Supporting the Board Director in driving regional imperatives

- Supporting the improvements of AR and AP management

- Supporting cash forecasting

- Supporting monthly financial close process

- Supporting on cost management

- Supporting the key commercial matters

- Supporting the identifying value adding opportunities

- Acting as a key member of the Cambodia management team

*Roles & Responsibilities:

- Support the Board Director implementing finance policy

- Taking daily responsibility for the Cambodia finance transactions

- Supporting MIO plan on client related profitability reviews

- Support the monthly financial close process where relevant

- Taking the lead in providing broad feedback on financial close process each

month to drive continuous improvement

- Provide Leadership and guidance to MIO in successfully supporting MD’s

- Driving the sub-region direct system operation [DSO] and develop program

operation [DPO] targets and managing down over dues

- Support MIO in driving down Unbilled and bed debt balances

- Supporting on large client credit assessments

- Provide feedback on performance relative to metrics, targets and budgets

- Drive monthly rolling 12 months forecast

- Identify and implement profit improvement plan initiatives where required

- Assess the profitability of the country and the underlying business units

- Assess costs against budget and prior year to identify costs that may need

further investigation and potential remedial action

- Oversight of the Country budget process for business analysis

- Implement general risk management strategies and mitigation activities,

encompassing clients, premises, assets, personnel, etc..

- Support MIO in any commercial matters, legal or otherwise

- Maintain compliance with local commercial laws & tax and requirements

- Support MIO channel in driving forex policies and in identifying any

opportunities to improve forex management

- Support cash management activities to ensure cash is available to meet

business needs in flow or petty cash.

- Provide general support to drive “value-add” initiatives

- May perform other duties as assigned

* To be successful in this role will require the following:

- Track record in driving financial close on Oracle/1View

- Solid track record as a Finance Business partner

- Ability to drive MIS and DPO improvements in MIO project

- Internally motivated, self-starter with ability to plan, organize and establish

priorities to meet goals and achieve results.

- Strong financial acumen and critical analytical skills

- Detail oriented demonstrated leadership, people and process management

skills

- Excellent relationship building skills ability to write reports, business

correspondence

7 Years

Experience

Holding

BBA, MBA

of Finance

Banking

-Effectively present information and respond to questions from groups of

managers, clients, customers, and the general public.

- Ability to calculate figures and amounts such as discounts, interest, and

percentages.

- Ability to solve practical problems and deal with a variety of concrete

variables in situations where only limited standardization exists.

-Ability to interpret a variety of instructions furnished in written, oral, diagram,

or schedule form.

-Oversee all accounts, ledgers, and reporting systems ensuring compliance with

MIO clearly communicate monthly, quarterly, and annual financial statements

-Assist leadership team in the annual budgeting and planning process;

administer and review all financial plans and compare to actual results with a

view to identify, explain, and correct variances as appropriate.

-Support the RM & BDM in engaging the external’s audit and company BOD

around issues and trends in financial operating models and delivery.

-Oversee all financial, company business; ensure that expenditures and profit

target are consistently aligned with company bottom line have been set.

-Set the objectives for each staff in the department and allocate the work

appropriately

-Prepare all procedures and update for new procedures if needed

- Make sure all procedures are respected and followed accordingly

-Coordinate collaborations with other departments

- Supervise all underwriting applications

- Coordinate training activities and supervise implementation

- Prepare the monthly and yearly budget of each Department

-Organize and Supervise end of the year evaluations for all operations staffs

- Report to meeting every week for all matters related to Operations

- Report to the Board of Directors for all matters related to Operations

Assistant

Accountant

-Verify all branch financial transactions and financial supporting documents

-Verify the liquidation of advances, prepayments, non-cash transactions and

other adjustment transactions; and ensures that there are completely supported

with valid documents.

-Ensures tax obligations and other government regulations are fully complied

-Review and submit regular reports to related department;

-Monitor and control expense/payment request based on approval annual

budget

-Preparation and analysis of field operations reports using the required MIS

format;

-Maintenance and upkeep of the software as well as computer machine; and

Initiates accreditation of suppliers of regular items/ services being purchased;

and

-Supervise all branch/sub-branch support staff.

-Maintain all financial transaction & enter all transaction into company system.

-Manage company bank account transaction and petty cash transactions.

-Prepare invoices, payment and receipt vouchers.

-Prepare monthly staff payroll & process

-Review and process expense reports and report to CEO

-Prepare weekly bank reconciliations and petty cash replenishment reports

-Prepare monthly tax calculations and liaise with Tax Authority.

-Control Fixed Asset and register.

-Maintain up to date filing documentation.

3Years

Experience

BBA of

Accounting

-Liaise with government authority for company related matters

-Report to CEO on all MIO financial and admin matters.

-Other duties assigned by Finance Manager and Head Department.

Internal

Auditor

-Perform risk assessment and produce audit program or audit testing procedure

-Conduct audit mission and other assignment

-Participate in developing audit report

-Prepare audit reference, evidence, and reporting.

-Interview staff and overall observation.

-Identifying and documents risks associated with operational and financial

processes and procedures as well as MIO performance indicators

- Supports to identify risk owners and establish adequate mitigating controls

and action plans

- Involves in monitoring and evaluation the implementation of controls and

action plans

- Assists in developing policy and procedure recommendations to mitigate risks

- Supports to prepare and produce risk ranking tools on a regular basis to

support decision making

- Involves in identifying key issues/ topics from IA reports and other sources

- Assists in developing the action plan with capacity building materials, budget

and schedule for approval

- Supports to implement capacity building plan, monitor results and create

recommendations for further work based on lessons learned and observations

- Evaluate and follow up loan approval delegation process to ensure that loan

approval decision is properly made

-Prepare the monthly compliance report required by regulators and other

stakeholders

- Willingness to travel to support operations and staff training at provinces

5 Years

experiences

BBA

Asst. MIS

Manager

Regular Duties:

-Create reports and graphs as requested

- Create automated reports and dashboards

- Provide troubleshooting assistance for reporting functions

- Participate on projects to develop new reports and dashboards

-Ensure that the proper systems/procedures and controls are in place and

correctly implemented by employees.

-Design/implement revised and/or new procedures to support

market/operations/production changes.

-Ensure timely and accurate generation and execution of all MIS operations. -

Identify and recommend improvements to established procedures, forms and

workflows.

-Monitor the reconciliation and research of discrepancies in MIS project data.

-Act as MIS Consultant to Managers in order departments.

-Prepare monthly volume statistical report.

-Keep track of supply form inventory.

Supervisory Duties:

-Provide technical expertise to guide subordinates in the execution of their

roles.

-Review and approve all MIS documents prepared by subordinates relating.

-Assist with operations by providing support and expertise, especially during

peak hours.

-Cross-train in all functions in order to cover any position in case of

emergency.

-Maintain and monitor employee attendance records.

-Evaluate performance, recommend increases

5Years

experience

-Participate in the hiring and termination decisions of staff assigned to MIS

unit.

-Professionalism in interdepartmental and customer contact.

-Ability to handle stress situations pertaining to MIS operations.

-Maintenance of high levels of product quality and staff productivity.

-Accurate and timely execution of all MIS processing in order to minimize

backlogs.

-Conduct training on MIS activities to increase staff expertise.

-Supervise and motivate MIS team to work collectively and efficiently.

-Coordinate with MIS team to ensure that technology, infrastructure and

operational requirements are met.

-Plan and manage upgrades of hardware and software systems.

-Track and monitor security of hardware and software systems.

-Recommend and implement new technology solutions to improve

productivity.

Branch

Manager

-Prepare planning for promotion about MIO services.

-Commercial development notably through regular sale marketing &

Promotion.

-Manage and lead teamwork to the target area.

-Manage Credit Officers, Branch Assistant, Guard, and Cleaner.

-Animation of the Social life, relationship with members and elected members.

-Professional management of Credit, Savings, Treasury and collaboration with

the central unit.

-Control Cash / Budget usage of MIO with Partner Banking.

-Prepare monthly and weekly report of financial statement to department

manager.

-Prepare key performance indicator (KPI) report to observe business

regulation.

-Follow up and monitor loan late from customers.

-Communication with partnership for staff salary-transfer with MIO Siem Reap

Branch.

-Check all asset & equipment in and report to Finance and Audit department

every month.

-Channel marketing preparation and area competitor spread market.

-Supervise activities of the branch.

-Bring in new customers and boosts profits

-Create and analyze management information and reports.

-Set targets and ensure they are met.

-Train and supervise staff.

-Hire and terminate staff according to needs.

-Market and publicize new and existing products and services introduced by

MIO.

-Responsible for the general maintenance of the facility. Ensure that all

security procedures are strictly followed, branch is operationally sound, and

satisfactory audits are achieved.

-Collaborate in the hiring, training and retention of staff.

-Supervise, coach, and develop staff regarding service expectations, policies,

procedures, products, systems and banking transactions.

-Facilitate regular employee meetings to discuss goals, disseminate company

information, discuss operational issues, etc.

-Responsible for growing customer base; consumer and business relationships

through internal and external marketing programs.

-Maintains the highest level of confidentiality with all information obtained.

BBA or

Master

Degree

5-7 Years

experience

-Perform as a team member in allocating and coordinating the work flow.

-Contribute to the fulfillment of department and company objectives and goals.

-Comply with all department and company policies, procedures and

regulations.

-Meet expectations for attendance and punctuality.

-Other duties as assigned.

Chief Credit

Officer

*Scope

The Chief Credit Officer is responsible for the day-to-day oversight and

administration of the application’s loans. This position is also responsible for

establishing internal loan controls and written policies and procedures for Board

approval, and thereby ensuring the quality of the loan portfolio.

-Develop annually and monthly disbursement plan

-Control bad debt exposure and expenses

-Initiating legal or other recovery actions against non-payers

-Responsible for the day-to-day supervision of the credit officers’ portfolio of

sensitive accounts

-Formulates the work plan for the CA team and co-ordinates implementation of

the plan

-Ensures that in attending to their portfolio, CAs’ work is directed to achieve.

-Follow-up the process of product enter into market

-Channel network implementation of marketing system and stability of product

-Follow up with credit agents all MIO Credit Policy and method to meet MIO

regulation

-Observation and direct audit with value of collateral flow chart and CA

operation

-Cooperate with CA and BM of reducing loan late

-Idea of growing model and customers idea changing observation

-Check and site inspection with CA of collateral document and ensure all are

valuable.

-Evaluate CA performance, push and assist as need

-Assist CA to analyze on customers with formula [5Cs] *Character; *Capacity;

*Condition; *Collateral; *Code Ethic

-Assist CA to analyze on customers with formula [4Rs] *Right Time; *Right

Capacity; * Right Condition; *Right Collateral.

2or3 years

experience

BBA

Credit Agent

-Promote products and services

-Handle credit enquiries and applications

-Collect and investigate documents and information for credit assessment

-Initiate customer contact and conduct visit

-Conduct preliminary credit interview, site visit for collateral, due diligence,

and property valuation

-Perform credit analysis based on credit principles and client protection policy

- Prepare credit proposal and submit to Credit Committee for credit decision

-Monitor existing loan accounts and conduct periodic credit review

- Build and maintain good relationship with borrowing customers

-Follow up MIO plans of [5Cs] & [4Rs] formulas

-Follow up with tellers to process re-payment and loan disbursement

-Reporting of bed debt and recover loan late

-Observation of customer ethic and knowledge changed

-Reporting to branch manager and Chief Credit Officer on daily basic

Entry

Level

Teller Cash

- Perform and handle MIO transactions for customers ( Deposit, withdrawal,

Fixed, Remittance, Currency Exchange)

- Carry out MIO operations and support tasks and take care of customers at

banking hall to promote and maintain positive relation with all customers

- Record and keep cash books, revenue and expense receipts and other

information related to cash and other tasks assigned by supervisory level

- Perform filling for all documents on frontline transactions

- Assist the supervisor level to provide satisfactory MIO services and

operations support to all external and internal customers

-Ensure all financing transaction records are maintain in compliance with

accepted policies and procedure

-Operate cash registers and Ensure all receiving credit are correct and

consistency

-Receive payment from customers and provide change as shown by the

electronic cash register / re-check of double cash counting for verifying ensure

-Process payment for accounts such as telephone or electricity bills and issue

receipts

-Work out totals for cash and other takings at the end of each working day

-Count and prepare money for daily shift closed

-Keep records of amounts received and paid, and regularly check the cash

balance with accuracy and timely/monthly/yearly end close,

-Maintain all financing related documents, and perform other tasks assign by

direct manager.

-To follow up with credit officers, and chief credit all bill re-payment and loan

disbursement record

-Report to supervisory level of daily loan late and bed debt

-Verify with all customers to ensure all amount receiving and payment are flow

to MIO regulatory

-Other job assigned by management team

Entry

Level

Teller System

-Work out total of MIS system and data entry in accurate in daily usage

-Responsible to provide the information in system entries to chief credit or

branch manager

-Receiving all loan document from BM to decides and update into MIS

-Check and update all information related to documentary which

accomplishment MIO procedure

-Create and update data and customers account in MIS as required

-Check all wrong information and up to date of reserve or adjustment for

admin send to head office up to date

-To follow up with credit officers, and chief credit all bill re-payment and loan

disbursement record and ensure data entry is done

-Print out all daily re-payment to all credit agent and chief credit officer to

follow up with customer

-Follow up in case of any officer resigned, ensure the data base instead of name

are appeared in MIS in accordance

-Ensure all late re-payment are informed to credit officer and chief officer

before 2pm every working days

-Daily back up transaction and compress by day keep in computer

-Ensure daily shift closing is up to date

-Cooperate with credit officer and supervisory level to check all listing of

disbursement

-Print all teller report for administrator in daily operational

-Print out weekly and monthly reports for branch office to check

-Back up all data at the end of month for head office

Entry

Level

Date post:	07-Feb-2017
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MIO Business Plan

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