AMK PROFILED AS SOCIALLY CONSCIOUS MFI
In June 2009, Unitus's partner AMK was among the first to receive a Social Performance Reporting Award. Given out by CGAP, together with its partners the Michael & Susan Dell Foundation, the Ford Foundation, and the Social Performance Task Force (SPTF), this award recognizes transparency in social reporting. Currently, over 200 MFIs have applied to be recipients.
In November 2009, CGAP featured an interview with AMK's CEO, Paul Luchtenberg, titled: "AMK Cambodia: Profile of a socially conscious MFI." The following are exerts from that feature:
"In operation since 1999, AMK is a nonbank financial institution with the mission of helping large numbers of poor people in Cambodia improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services. “Help" is a key word here,” says AMK CEO Paul Luchtenburg. “It demonstrates that our goals are greater than just providing financial services. We want to, at a minimum, ensure that we are doing no harm and, as much as possible, ensure that our clients are helped by our services.”
The other key concept according to Luchtenburg is reaching as many poor people as possible. “We do this by putting most of our effort into areas where the poorest people are located,” says Luchtenburg, “which in Cambodia are the rural areas.”
Putting its money where its mouth is
AMK is putting its social performance objectives into practice by expanding into remote rural areas. AMK currently covers all provinces of Cambodia and 36% of all villages--and is still growing. What’s more, AMK has the smallest average loan size of any MFI in Cambodia (US$110) – an indicator of the income level of its client base.
“Some of AMK’s other initiatives include integrating social performance into systems like monitoring client protection through the inspections department and instituting training and incentives as part of AMK’s human resources systems,” says Luchtenburg. As for its customers, AMK’s client protection code of practice includes ensuring complete transparency in transactions. On the investor side, AMK seeks like-minded partners, excluding those who do not have strong social objectives.
Improving AMK’s social performance transparency
AMK strives to further its social performance transparency through its Social Performance Committee, “which mirrors the audit committee on the financial side,” says Luchtenburg. AMK has developed award-winning tools and a framework to make reporting clear for the board. AMK also reports on social indicators on its Web site and annual report, and MIX reporting and conducts social and market research to understand its clients’ needs. AMK was the first Cambodian organization to sign on to the Microfinance Transparency movement.
Why is social performance transparency important to AMK?
“With a history of financial transparency, it is natural for AMK to commit to social performance transparency,” says Luchtenburg. “And transparency is a key feature in social performance management. While AMK has made progress in the area of social performance, we still have much to learn. In being transparent about our social indicators, we create an environment where we can help others in things we have done well and learn from others in areas we need to improve.”"
