Cambodia,  SE Asia

Volunteering Abroad

November 30, 2018 / 3,336 Comments

 The quality of your life will be determined by the quality of your CONTRIBUTION.

– Kurek Ashley

Getting Started

When I first planned my year (ish) of travel, I always knew I wanted a portion of it to include volunteering in microfinance in a foreign country.  I’ve read every book I can find on microfinance, the principals of social enterprise, and the economics of poverty reduction policies in developing countries for YEARS.  There’s a reason why I spent 10+ years on a career in banking.  Yes, I’m throwing that all away now because I need a change of scenery, but I’m still a giant econ nerd.  Plus – why not volunteer in an area where I can contribute the most?   

Hopefully. 

I’m in Cambodia to volunteer for seven weeks at Mitt Kaksekor Financial, a microfinance organization based in Phnom Penh.  The company provides small dollar agricultural loans to rural farmers throughout Cambodia. 

Even though it’s unpaid, it’s still nerve wracking in the same manner as showing up to the first day of a new job.  I felt well-read and experienced when I got here, but I know by the end this I’ll get schooled on everything I don’t know. 

Microfinance – The Lowdown

For those that haven’t read a handful of books and listened to dozens of financial podcasts about the fascinating topic of micro lending – a brief background.  I promise I won’t go Cassie-finance-ranting (because I definitely CAN DO THIS IF YOU LET ME).   

The goal of microfinance is to provide access to reasonably priced banking services for people that otherwise lack access.   There.  Simple enough, right? 

People in developing countries lack banking access for a lot of reasons that have nothing to do with walking in an actual bank.  I can assure you there are plenty of banks in Cambodia.  Poor people can’t document their income, don’t own anything that can be used as collateral, and don’t have credit bureau scores to prove they pay their bills on time.  A traditional bank often views poor people as too risky, and too much work for a small amount of money.    

Microfinance tries to fill this gap.  These organizations make less money than banks, and are often supported by foreign grant money.  They still charge interest for loans (it’s not a free giveaway), but loans are smaller, and customers are assessed based on their character, experience, and reputation.  Lenders here literally talk to village leaders to get a feel for whether farmers are a responsible and a reasonable loan risk.  

The Challenges of Cambodia

I’ve learned so much more about the challenges of being poor in a developing country from volunteering in Cambodia.  For example, there’s no health insurance here.  Cambodians must pay their doctors and hospital bill paid immediately in cash, or they’re not seeing a doctor at all, and this includes trips to the emergency room. 

The government also doesn’t have enough money to pay for many social services.  There’s also no such thing as social security, disability, unemployment benefits, or free schooling in Cambodia.  Parents must pay a few dollars a month just to send their kids to grade school. The cost doesn’t seem high, but when a third of the population makes less than $1 a day, it makes a difference.  My roommate, Donna, works in a local school in Phnom Penh.  She told me it often happens that kids will disappear from school for a week or two at a time, because parents didn’t make enough money to pay the tuition payment that week.   

I’ve taken these kinds of benefits for granted my whole life.  Not to mention, my own ability to easily get a loan from a bank.  Loans paid for my car to get to work when I couldn’t buy it in cash, my college education, the house I live in, and the credit card I use to buy my morning coffee.  Without all this – where would I be in life??  At a minimum I’d be sitting on a city bus heading to my unskilled job, cranky and uncaffeinated. 

No one wants that. 

Getting to Work

On my first day I met with Mitt Kaksekor’s CEO, Somith and he gave me an overview of the microfinance organization in his office. 

  • Seven weeks here 
  • THE OFFICE

It’s a doozy.  The organization is losing money and is on the verge of bankruptcy.   Mitt Kaksekor, or MKK as I’m going to abbreviate it, was previously part of an NGO. but due so some change in Cambodian law which I don’t fully understand, separated from the NGO to operate independently.  Over 30% of their borrowers are in default.  One problem  problem is that borrowers still think of MKK as being an NGO supported by foreign money.  Therefore borrowers don’t think there are real consequences for failing to repay.  Furthermore, Cambodian law prevents MKK from reposessing any of the land or homes held as collateral.  So there really aren’t any real negative consequences for lack of repayment.   

Then there’s another problem associated with the textile industry.  According to Somith, many of the farmers MKK lends to are small, family owned farms that just make enough to feed their families.   Borrowers make their loan payments from outside income earned by the farmers’ sons or daughters working in textile factories.  In the last few years,  various human rights groups have called out Cambodian factors for multiple violations in these factories.  As a result, many factories may soon be shut down. 

These challenges have led MKK to the not so obvious conclusion that they need to open a Pawn shop to supplement income.  Yes, a pawn shop.  Which, as it turns out, is different in Cambodia than in the US.  A pawn shop here is a loan shark, a pay day money lender, which can charge crazy high interest rates for short term loans.  We’re talking 30%-60% annual rates.  A microfinance, by Cambodian law, can’t charge more than 18%.  MKK needs to make more money, so their solution is to find a way to charge more.  Oh, and they would like me to help write the business plan.  And present it to the Board on Saturday.

I learned all of this on Wednesday afternoon.  

On Saturday morning following my first week of work, I gave my Board presentation discussing the Pawn Shop business plan.  I did the best I could considering I’m in a foreign country and put it together in two days.  I think it went alright.  Mostly I sat in a three hour meeting that was 90% in Khmer and learned that Board meetings in Cambodia are similar to bank Board meetings in the US.  It’s a lot of talking.  A lot of charts and power point slides.  Whether in english or in Khmer, who knows what gets accomplished by the end of it. 

Life Panic

Aside from the unexpected surprises at my job site, my first few weeks here expose other scary challenges.  I’m back working in an office.  And this situation has caused me a slight case of paralyzing panic.   

Working in an office at a desk job again

I’m interested in what I’m learning here, but I after months of being a vagabond world traveler I just HATE sitting at a desk again.  I truly despise it.  This has me staring in the face of the question I have been very successful at avoiding for the last 6 months. 

What the hell am I going to do with my life when I get back to DC??

I’ve spent more than a few days here wandering the streets of Phnom Penh after work, trying to walk away my fears and frustrations.  I can’t go back to a desk job.  I just can’t.  Not to be dramatic but it feels like I’m experiencing a slow death involving hours of artificial lighting and blindingly staring at a computer screen.  But jesus…I have a degree in economics and finance and 10+ years experience in banking.  BANKING.  The very definition of a desk job.  What the hell was I thinking???  

I feel frustrated.  Lost.  Scared.  Downright terrified.  I have a house and a mortgage.  I spent the last decade building a career I’m not sure I want anymore, and the last six months blowing my hard earned savings account. It’s been great, but I have to go back to the real world at some point.   

What do I want to do instead?  I didn’t know when I was 20 and I sure don’t know now.  I know I can’t stow away in an office working on spreadsheets and powerpoint presentations that get buried in a report for only a dozen people to ever read.   Still….I have no freaking idea how to turn my past experience into something different than this.  

After a few days of this and a few glasses of wine, I begin to calm down. 

Ok.  Breathe. 

I tell myself this feeling is normal.  Many people undergo a mid-life career change because they spend time in something, and realize it’s not for them long-term.  My very own (older) brother is going back to school next year to do something completely different with his life.  And I don’t feel scared for him –I feel proud of him.  I one-hundred percent trust that he is a responsible human being and will figure it out just fine. 

I’m responsible.  And smart. I’m hard working.  I don’t want to be the type of person that shies away from a challenge out of fear of the unknown.  I want to take some risks in life.  Hell, that’s why I’m on this trip, isn’t it? 

I got myself here and I can get myself through the next chapter. I tell myself that fear is normal.  Its how I know that I’m stretching myself and growing.  

With a few more walks, and a few more classes of wine, I realize I can absolutely mother fucking figure this out.  

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