Cambodia Investment Review

AVPN Hosts Inaugural Impact Investment Roundtable 2023: Building a Collaborative Ecosystem for Social Impact in Cambodia

AVPN Hosts Inaugural Impact Investment Roundtable 2023: Building a Collaborative Ecosystem for Social Impact in Cambodia

Cambodia Investment Review

The Asian Venture Philanthropy Network (AVPN) hosted its inaugural 2023 roundtable discussion in Cambodia under the theme of ‘Unlocking Potential Through Impact Investment’ the event hosted at Raintree Phnom Pneh saw participation from an array of stakeholders integral to the growth and development of Cambodia’s investment ecosystem.

A total of 93 participants attended the event, with 31 AVPN members flying in from overseas. The event aimed to bring together diverse stakeholders involved in philanthropy, investment, and social impact in Cambodia.

Kevin Teo, Chief Operating Officer at AVPN.

Kevin Teo, Chief Operating Officer at AVPN, who launched the roundtable and spoke about the extensive range of stakeholders that attended. “What stood out for me was the broad spectrum of participants we were able to gather. Funders across the continuum of capital, such as foundations, family offices, impact investors, VC/private equity firms, and development finance institutions, were all present. We also had a significant presence of intermediaries like those focusing on early-stage startups, accelerator stage companies, gender-focused initiatives, and investment facilitators,” he said.

Read more: AVPN Cambodia meet-up focuses on mobilizing impact investment resources

Kevin emphasized that this diversity is instrumental for growth. “It takes a village to grow the ecosystem, and this village will eventually advance development and economic growth in Cambodia,” he added.

Cambodian Ecosystem Growing with Unconventional Partnerships, Yet Gaps Remain

The roundtables first panel discussion, moderated by Tommy Boukhris, Advisor for AVPN Cambodia, convened key figures in the Kingdom’s impact investment and startup ecosystem to assess its strengths and weaknesses. Hassan Hajam, Executive Director & Chief Impact Officer at Platform Impact, noted the uptick in unconventional partnerships, stating, “Entities that didn’t always work together are now doing so. For example, Oxfam is partnering more with impact investors to maximize the impact of their collective resources.”

Cambodia’s Venture and Entrepreneurial Ecosystem Panel Discussion.

Daneth Reasmey, CEO & Co-Founder of Tenbox, spotlighted the role of mentors and referrals in the startup ecosystem, saying, “From a startup perspective, we are fortunate to have mentors and conduits connecting us with investors.” In addition, San Sar, Impact SME Project Manager at Oxfam, expressed optimism about the local market’s growing potential. She praised the government’s efforts to promote inclusive business practices, stating, “While the market is still young, this creates increased opportunities, and collaboration with government agencies has also been very positive.”

In contrast to the upbeat tone, panelists did flag areas that could use more attention. Guillaume Requin, Head of the SME & Finance Department at Sevea Consulting, emphasized that better structuring was still required in the ecosystem. “There has been a strong push to better organize the ecosystem and to encourage cooperation rather than competition,” Guillaume commented. Bradley Kopsick, Cambodia Country Director at Insitor Partners, also added that while Cambodia may have a smaller market, it “punches above its weight in terms of impact investment.”

Investor Need to Help Startups Understand Essential Business and Impact Terms

Discussion further evolved around the value added by the ecosystem. Danneth Reasmey pointed out that the ecosystem helps startups understand essential business and impact terms. “We don’t initially think about impact; the ecosystem helps us understand what these terms mean,” Reasmey elaborated. Bradley Kopsick said that the ecosystem is making strides in preparing startups for investment by improving their understanding of essential business metrics like cash flow and customer base.

Read more: Cambodian Startup Tenbox Joins UNESCAP’s Feminist Finance Forum to Propel Women-Run SMEs

When it came to partnerships between startups and investors, Hassan Hajam expressed the importance of a hands-on approach. “We establish teams of venture builders that serve almost like a CFO or COO for a year, helping align business models with what impact investors are seeking,” he noted. San Sar added that the value lies in being able to “engage the government into the ecosystem to ensure that the reporting side can scale.”

Attendees of the AVPN Impact Investment Roundtable 2023.

Closing the first discussion, the panelists identified gaps that need addressing. Hassan Hajam called for an increase in patient capital and innovative financial instruments. San Sar emphasized the necessity for service providers and more local staffing, while Guillaume Requin mentioned the need to attract large-scale corporates. Bradley Kopsick flagged the sever funding gap in the $50k to $200k range, concluding, “We need someone to bridge that gap to attract more regional investors.” The discussion highlighted both the strides and hurdles in Cambodia’s rapidly evolving impact investment ecosystem.

Impact and Challenges in Scaling Women-Led MSMEs in Cambodia

Opening the second panel discussion Ian Jones, Executive Director of Mekong Inclusive Ventures asked: “When we talk about impact for a women-led SME, what do we really mean?” He brought up the importance of basic financial literacy and made a distinct differentiation between income and profitability. “Many of the women who participated in our financial literacy programs told me that while they’re not necessarily increasing income, they are increasing profitability. This, in turn, is benefiting their family and wider community,” Jones said.

Sopheap Chen, Founder and Managing Director of Keiy Tambanh Khmer Enterprise, identified three key challenges that women entrepreneurs face. First, she mentioned “the entrepreneur mindset,” explaining that many women struggle with comprehending the business they are in and the logistics of selling a product or service. Second, Sopheap brought up “educational limitations,” stating that what women learn in school and what they can later receive in terms of capacity building from NGOs, associations, and government programs often falls short. Third, she talked about the scarcity of resources, particularly human resources that are affordable and accessible.

Scaling Impact for Women Micro, Small and Medium Enterprises (MSMEs) in Cambodia Panel Discussion.

“People prefer to work for large, branded companies rather than small SMEs, especially those with tech skills,” she said. Sopheap also criticized programs like WEACT, which tend to focus solely on young women under 40. “Older women also require capacity building, particularly in technology-related fields, and they often financially supporting these younger women in their educational pursuits,” she added.

Keisha Gani, Acting Country Manager of SHE Investments, touched upon the intricacies of impact investing, pointing out that donor agendas often guide the focus of funded programs. “Donors have their specific agendas that then flow into the programs and ultimately to the entrepreneurs,” she stated. Keisha highlighted SHE Investments’ vision, emphasizing “A world where investing in women is an opportunity, not charity,” but also acknowledged that existing programs might still fall short in catering to the specific needs of women entrepreneurs.

Impact Investment Must Focus on Rural and Innovative Financial Products

Kevin Robbins, Country Director of iDE, shifted the attention towards rural areas, where “70% of Cambodia’s population lives, and agriculture employs approximately 50% of the workforce.” He presented a case study of a Cambodian woman who had to abandon her education at the 6th-grade level to start a business with high-interest debt. “She didn’t have the right connections, and she couldn’t find programs to help her build her capacity. These are the real-world challenges that many face,” Robbins pointed out.

Read more: Changes in Entrepreneurship Ecosystem & Opportunities to Further Support Women Entrepreneursv

Sabine Joukes, Chief of Party of the Women Entrepreneurs Act project (WE Act) from Pact, highlighted the challenges for women entrepreneurs. “Many would say ‘if only, I had a helper’,” she mentioned while discussing a pilot finance product developed in collaboration with Boost Capital and the National Bank of Cambodia. The product aims to offer “small loans without collateral at fair market rates.” Joukes emphasized the need for a support-based ecosystem that could provide ongoing support to women entrepreneurs and cater to their specific needs.

Attendees of the AVPN Impact Investment Roundtable 2023.

Closing the discussion, Ian Jones emphasized the long-term commitment required for capacity building. “It’s a crude way to phrase it, but we often ask these women-led MSMEs what would happen ‘if you get hit by a bus,’ essentially questioning how they are building the capacity of those around them,” he said. He also noted that Cambodia offers a unique market with abundant opportunities. “Investors need to understand how to de-risk their capital and recognize that there are many deals available,” he concluded.

The second panel discussion offered a multi-faceted view on the challenges and opportunities in scaling women led MSMEs in Cambodia, punctuated by insights rooted in real-world experiences rather than theoretical documents. The panel agreed that targeted, long-term interventions are crucial for the women entrepreneurs who are essential contributors to Cambodia’s economy.

This inaugural roundtable, spearheaded by AVPN, marks a significant moment in Cambodia’s growing investment and social impact ecosystem. Gathering a diverse array of stakeholders, from foundations and investors to social enterprises and NGOs, the event created a platform for fostering vital relationships and collaborations which will be vital to help achieve the ambitious aim to make Cambodia an upper middle-income country by 2030 and a high-income one by 2050.

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