Asia’s largest and most influential impact investor network, The Asian Venture Philanthropy Network (AVPN), together with Emerging Markets Consulting (EMC), hosted its first Cambodia Member Meet-up, bringing together the country’s leading impact investors, fund managers, and business support organizations.
AVPN is Asia’s leading social investment network ecosystem builder that works to increase the flow of capital towards impact in Asia, ensuring that resources are most effectively deployed.
The organization aims to approach social investment as a continuum of capital, in which funders may combine grants, debts, and equity across multiple investments within their own portfolio, to achieve a deeper impact.
AVPN Mekong Region Director Prae Sunantaraks gave the meeting opening remarks outlining the importance of mobilizing all resources in the social investor community to continue capital inflows into Asia for social good.
“Everybody in Cambodia’s social investment community must work together to increase the current level of social investment in Cambodia. Ensuring that socially-minded entrepreneurs can access capital is critical to building up Cambodia,” she said.
Tommy Boukhris, Senior Consultant and Portfolio Manager at EMC, and Cambodia Advisor with AVPN hosted the event stating:
“Regional impact investors and fund managers are increasingly interested in Cambodia. They recognize growing opportunity, the thriving business environment, and more effort being placed on creating a climate that makes doing business easier,” he said.
“This said, there is more work to be done to better mobilize capital and allow entrepreneurs access to capital they need to grow and scale their businesses. AVPN and its members are committed to Cambodia. Working with investors to identify opportunities, and working with entrepreneurs to help them access capital, all coming together to create value and to have a positive impact on people’s lives through business and enterprise,” he added.
Social development funds
Two of the leading social impact funds Insitor Partners and Nexus Development gave company presentations highlighting the strong potential Cambodian business had if there were
Francesca Puricelli and Bradley Kopsick from the social development fund Insitor explained the fund was focusing on early-stage companies that have proven economics, a sustainable competitive advantage, and a clear path to profitability.
“Cambodia is a strong market for our social fund with many new and exciting ventures available for investment. We do find that many small and medium businesses in Cambodia however lack proper accounting and financial statements required,” they said.
Laura Alsenas, Head of Funds at the debt-investors Nexus Development said finding investor-ready business was a challenge for the fund adding that many SMEs could not answer how they would effectively use a cash injection or how they would sustainably pay the debt off.
“At Nexus we are debt-investors, not equity investors so the most important aspect for us is how we will get our debt repaid. Many small business owners are focused on growth which is great for equity investors but not for us,” she said.
NGOs bring awareness
Swisscontact and Care Cambodia are non-government organizations focused on bringing more awareness of social investment through funding education and hosting workshops to develop technical skills.
Rajiv Pradhan, Country Director Cambodia, and Sokhuy Lay, RISE Technical Assistance Manager from Swisscontact explained their organization’s effort to improve the entrepreneurial ecosystem in Cambodia by deepening trust-based relationships.
“Swisscontact is currently operating both the Give a Day and Ecosystems Builders Network initiatives that bring together fund managers and entrepreneurial support organizations to establish a better relationship and foster more collaboration,” they said.
Sophoan Chan, Technical Advisor of Gender at CARE Cambodia explained that the international development organization is fighting global poverty with a special focus on working with women and girls to bring sustainable changes to their communities.
“Cambodia needs to increase opportunities for women and girls to develop their small and medium enterprises into larger corporations. We are promoting more women at the management level for local business,” she said.
To read more about the Give a Day program click here.
Opportunities and challenges
Some sustainable entrepreneurs in Cambodia have commented that impact investors sometimes have their own demands that simply can’t be met or can be subject to burdensome certification. In addition, complicated registrations, surprise fees, and unclear tax information make operating a small business in Cambodia remain an issue.
According to AVPN, Cambodia has a strong investment landscape potential with a strong social sector and government support Cambodia has become a world leader in reducing poverty.
Political stability gains have meant investment in Cambodia is ready to be unleashed. The labour market is developing and becoming stronger, however, some weaknesses in the market hold back tremendous potential. Worker rights have come a long way and improved, yet there is more room for improvement. Furthermore, domestic demand has significant under-utilized capacity, which is untapped opportunity, they added.