Forty broiler hens produce a whopping 1.6 kg of manure a day. That's over 600 kg a year! So what to do with all that poop? Stockpiling it is the surest way to upset village neighbours and contaminate groundwater.
Enterprising franchisee Em Chanty (above) is turning her poop pile into gold, creating a second source of dry-season income for herself so she can afford to stay on her plot of land year-round. Chicken poop makes excellent dry manure which naturally fertilises crops without the need for expensive synthetic fertilisers. Em Chanty has paid for a well on her land to irrigate crops in the dry season and is now producing a flourishing crop of snake beans, eggplants, tomatoes and pumpkins for sale, all nourished by the composted waste of her broiler hens.
Our approach to partnering with Em Chanty and her community will always be collaborative - we learn as much from her as she does from us. When we started, the prevailing attitude was bring in the aid experts. We did the opposite. We've seen what happens when said 'experts' leave. Believing that sustainable change happens from within communities, we were intent on smashing the stereotype of westerners saving the poor of the world, instead learning through trial and error with the village producers.
In April last year we switched from commercial breed to indigenous village chickens because of cheap mass-produced imports from Vietnam. Since the switch, Em Chanty has earned US$115 in profit from her chicken sales. In total Em's amassed US$123 in Catalyst business savings. On average, franchisees have increased their daily income by 19% (on days worked), and they've increased their savings by 50% compared to baseline. They've achieved this without any giveaways, through their own efforts. The only thing we've given them is opportunity, as we believe handouts kill innovation and self-reliance.
Imagine trying to find buyers for a batch of 800 chickens in one 'fowl' swoop - that was the problem local field manager, Phirun Oum, was tasked with at the end of every chicken cycle. It's fair to say a few feathers were getting ruffled in the process.
Now, in a quantum leap forward we've just nailed daily supply! We've managed to switch from sporadic large-batch sales, to selling up to 30 chickens each day, all made possible by the new production coops at the microfarm.
We're egg-static that Phirun's hard work's paid off and we've now got five happy customers regularly buying from us. Three of these customers sell fried chicken on one of the busy highways from the capital city to the flourishing southern coast.
As Phirun explains, "daily supply cuts out unscrupulous middle-men and we get better prices for the franchisees as we keep our customers". Regular customers also know that by choosing Catalyst chickens they're helping the poor in their community (franchisees receive 100% of the profits for the chickens they've raised).
In Cambodia to explore market opportunities in the NGO restaurant sector, Gerard accompanied Phirun on a recent profit payment trip to group seven franchisees. Happy to receive their profits, they expressed new-found hope for their future, and had only one question for Gerard: "When can we raise more chickens at a time so we make more profit?".
Over time, they'll raise increasing numbers of chickens, but to decrease their business risk they start small.
Without the programme, Muth Sinath and Chrun Vannak (pictured above receiving their profit payments) wouldn't have access to fast growing commercial-breed chickens, as the chicks are normally only sold to large-scale producers in Cambodia.
Franchisee profile - Chrun Vannak
Chrun Vannak used to be a builder until a cow charged into his back a year and a half ago in a rice paddy, tragically leaving him paralysed and unable to work. The family borrowed money to pay his USD$6,000 medical costs while he was in hospital, vulnerable to unethical doctors who repeatedly told him if he stayed just "one more week" he would be able to walk again. He has two steel rods in his back and the same doctors are now advising him that he will walk again if the steel rods are removed, for which he would be charged another $600.
Back home after the accident with four children to support and only $7.00 in savings things seemed bleak. His younger children weren't able to attend school regularly as the only household income was from growing rice on three hectares of land.
But last year he became a franchisee, once again able to contribute to household income. So far he's raised 157 chickens and earned a valuable profit of NZ$83.00, giving him renewed hope for the future.
Five things you didn't know about Cambodia
With summer finally here and 2016 just around the corner, apart from breaking out the BBQ and the jandals (or thongs for our Australian friends), we thought we'd take just a moment to share our vision for 2016 and beyond.
Social entrepreneurialism is all about using the tools of business to deliver the most positive social impact. We've set an audacious, yet achievable, annual earnings target of US$457 and a savings target of US$450 for an average franchisee by their third year of part-time chicken raising. To put that in perspective, and by way of comparison, a large well-resourced international development organisation has raised average incomes for people in Burundi by just US$65 per year through market access initiatives.
With 65 franchisees enrolled in the programme so far and the new micro-farm set up we plan to enroll 195 franchisees by the end of 2016, and then launch a second hub in another Cambodian province by 2017.
By 2025, our target is 15,000 franchisees
working their own way out of ultra-poverty.
We've recently put together a snappy energetic business plan to aid our expansion. If you know someone who has difficulty deciding which luxury house to spend the weekend at, but who also wants to do some social good by backing a fresh business approach to development, please do drop us a line!
Something to chirp about
Thanks to the generosity of principal funder TALKINGtech Foundation, the micro-farm is now operational...
All seven production coops & feed storage area are now complete, the water supply & plumbing system has been set up, electricity supply connected, and the fencing is underway. The move to the new farm hub and infrastructure set up has meant production's been on hold for several months but franchisees are once again rearing chickens - and we're already raising the fourth of seven batches of baby chicks in our new daily-sales supply system.
Sounds messy but daily-sales is the 'glue' holding our new production model together and the key to our expansion and sustainability. Local markets demand daily supply and with the micro-farm we now have the capacity to achieve daily supply through both franchisee and farm supply. With around 1,200 chickens each month to sell now, Phirun's been busy building relationships with buyers. So far we've got two market stall customers lined up for the first sales in early December. Not quite an avian empire yet but we're well on the way!
Grateful thanks to TALKINGtech Foundation and the farm appeal donors who made the dream of a new farm a reality.
Make a difference not just a living. Unknown
Happy summer & thanks for your support,
Gerard & Hana, co-founders.
Microloans once seemed like the ideal solution to poverty. Lending the ultra-poor money to start or expand their own microenterprise to lift themselves out of poverty was an attractive proposition. For a long time microfinance was untouchable and unchallenged but now the gloss has come off and there is a growing realisation that microcredit actually harms the ultra-poor via indebtedness and unsustainable spending on consumption.
We're seeing the adverse impact of microfinance programmes first-hand in Chhouk. Cambodia has one of the fastest growing microfinance sectors globally with 45 organisations (including NGOs) providing small loans to 1.8 million borrowers. Borrowing from multiple sources is common and competition for clients is intense.
Most franchisees coming into our programme are current or past microloan borrowers and many struggle to repay loans with interest rates of up to 40% per annum.
Here are some recent examples of microfinance impacting franchisees in our programme:
1) Two franchisees, (mother and daughter) recently opted to leave our programme and move to Phnom Penh, (the capital city) to work in construction (the most unsafe industry in Cambodia with no worker protection laws) because they could not afford to pay weekly microloan repayments owed to two microloan agencies (one of which is the microfinance arm of an international aid organisation operating in NZ). They had used loan money for living costs and housing materials not income generation.
2) Another franchisee with microloan debt has also opted to leave our programme as he is frequently away from his village working in a different area breaking up rocks to earn extra money, and is therefore not around enough to look after the chickens. Again, he had used loan money for housing materials not income generation.
3) One franchisee stole money from our programme and used it to repay microloan debt instead of repaying the money he owed us for chickens. His microloan debt of $100 is owed to the same aid agency above and he is visited daily by microloan field staff seeking repayments. He owes money to multiple private lenders as well.
4) The same aid organisation's field staff advise borrowers to send their children to work in city factories (ie sweatshops) if they have difficulty repaying loans, which breaks up the family unit.
5) Several current franchisees have requested withdrawal of their poultry business savings from our programme to repay microloan debt - however this reduces their financial buffer and future income earning ability, as low business savings means we have to limit the number of chickens they can raise in order to limit their risk.
These examples show it's really more accurate to use the term 'micro-debt' than 'micro-credit'. In contrast to microloan programmes, we've designed our programme so that none of the franchisees leave the programme financially worse off than they started and we've deliberately eliminated the risk of indebtedness.
Based on what we've seen, we believe that aid organisations should refrain from obscuring microcredit's potential for harm; avoid empty rhetoric that falsely raises expectations about microfinance; and most importantly avoid offering the ultra-poor continuing loans because the longer people are engaged in microfinance schemes the greater the risk of harm.
Five Problems with microloans
We don't use cash credit in our model because:
1) It's expensive money - the poor are charged up to 40% interest per annum by both commercial and charitable lenders. That's far higher than average credit card interest rates in NZ, so borrowers need a very profitable micro-enterprise to avoid indebtedness.
2) Microloans are not well understood by poor borrowers - borrowing requires a level of financial literacy which the ultra-poor simply don't have. The Cambodian Minister of Women's Affairs has recently spoken out about microfinance causing people to lose their land and enforce children into prostitution because of debt.
3) Microloans cause financial harm to the ultra-poor through indebtedness A recent study of microloan borrowers from Cambodia showed that 56% had more than one loan; 51% had struggled to repay microloans on time and 34% were either insolvent or at risk of insolvency. Some microloan borrowers have up to six different loans each.
4) Microcredit is often not used or repaid the way donors think it is - Research shows that poor borrowers often use microloans for consumption/events (eg franchisees report using past loans for weddings) or debt repayment on other loans rather than income-generating enterprise. In Cambodia, a study found that 64% of borrowers used income from wages rather than entrepreneurial activity to repay loans (eg from family members working in urban areas).
5) Microloan programmes are not based on rigorous evidence about what's best for the ultra-poor - Evidence internationally shows that microcredit leads poor people into cycles of debt and the longer people are engaged in microfinance the greater the potential for harm.
In the last batch of 900 chickens raised by franchisees (groups two & six), 67% made a profit, 25% broke even and 8% made a loss in the cycle (due to stock loss). Of those who made a profit, the average profit was NZ$59.00. Profits were earned over 50 days for about 30 minutes work a day. This additional income is important supplemental income for people normally earning between $0.50 and $2.00 per day.
Top performer, Ben Tabb (above right) earned NZ$87.65 in the cycle working part-time for half an hour a day. When he started the programme, Ben (age 45) had a total of NZ$14.35 in life savings and an irregular income working in construction. Since joining as a franchisee he's had total sales from his chicken-raising business of NZ$1,606.25 which has earned him a profit after expenses of NZ$354.78. Better still, he now has savings of NZ$177.20, which will act as a buffer against future hardship.
Funding a family like Ben's to join the programme is easy, if you'd like to find out more click here.
Our most ambitious project yet, the 0.9 hectare micro-farm is underway. The farm will become our new project base and is an essential part of our programme expansion and long term sustainability.
Three weeks ago our field manager, Phirun, was in a very serious motorbike accident.
With 1,100 chickens to sell for the microfranchisees, Phirun was returning from a sales trip in heavy monsoon rain when he hit a pot-hole on the flooded road and came off his bike.
He suffered a neck fracture and was completely paralysed from the neck down. As a small close knit team this was devastating news for us and we rallied to support Phirun and keep the programme going.
After two nights in hospital in Cambodia, his family moved him to Vietnam by ambulance for better medical treatment where he stayed for a week.
Since then, his healing has been miraculous.
From being completely paralysed, every day Phirun has made a little more progress toward recovery...
First he could sense touch on his legs, then he could move his feet a little. Next came some movement in his right hand, then his left, and then he was able to move his legs and arms a little. When they were able to move Phirun out of bed, initially he could not hold his own body up in a chair. With further improvement he could manage to hold his own body weight whilst sitting.
And then, late last Saturday night we received a short video showing Phirun taking his first steps. Yep he is now starting to walk! Click here to see the video.
Throughout this ordeal Um Phor, Phirun’s father, has been a pillar of strength, firmly and resolutely declaring his son's healing "with God's grace".
The local user-pays healthcare system means Phirun's medical costs have totalled $2,800 to date, equivalent to a year's wages for a local NGO worker.
To take this additional burden off Phirun’s family, who’ve sacrificed a great deal to work with us helping the ultra-poor, we've contributed $1,200 toward Phirun’s medical costs, and we'd be so grateful for any contributions you can make to help cover the balance of $1,600.
It’s easy and will take less than 2 minutes – click here to help via our give-a-little page.
With more recovery time, we're looking forward to Phirun's eventual return as a very valued member of the team.
Gerard & Hana
Nak Vorn has doubled her life savings doing 35 hours' work as a microfranchisee! Nak is a 36-year-old mother of four from Prey Svob village. In her first chicken-raising cycle she earned an amazing profit of US$32.49 for one extra hour's work a day. Before joining our programme, her total life savings amounted to US$16.00. Half of Nak's US$32.49 profit is reinvested into her business, the other half she can spend on her family.
Previously, her main income source was from growing vegetables seasonally for six months of the year. For this she earned around US$1.35 per day for eight hours' work. As a result, her family has gone without regular protein, sanitation, or clean drinking water in the past.
Life savings nearly doubled - Ouk Chhav
Ouk Chhav is in our second microfranchisee group and earned US$48.23 (NZ$57.00) in his most recent chicken-raising cycle (after expenses). He achieved this working approximately one hour per day. Before joining the programme his main income earning activity was growing vegetables on one hectare of land, which only earned him around US$1.25 per day. His total life savings before joining up amounted to US$25.00, so the extra $48.00 has also nearly doubled his life savings and will help him provide for his family.
To find out more on how to be part of this program, please click here.
We're delighted to welcome Mr Ry (pictured above) to our team on the ground. We've recently employed 32-year-old Mr Ry to work in a support role for the microfranchisees. We realised that the villagers need more assistance to successfully raise their chickens, so Mr Ry will provide training and support to help the microfranchisees keep their chickens healthy along with managing chicken feed and transporting stock.
Mr Ry is very well-suited to the role with past experience as an NGO community facilitator. He has a Bachelor's degree in agronomy from Cambodia's National School of Agriculture and has undertaken leadership, communication and HR management training through Oxfam. He's even completed training in value-chain analysis so his skills will be invaluable to help us involve the ultra-poor in the poultry value-chain.
To find out how you can help, click here.
We’re about to embark on a whole new stage in our development! After three years of working on our franchising programme, we’ve outgrown our NGO partner’s small school site. This is where we currently raise one-day-old chicks through their vaccination period for the microfranchisees. We’ve also outgrown our central chicken coop which is starting to fall apart.
So it’s time to develop a micro-farm. The farm will be used to expand our central chicken coop facility so we can increase capacity, test new franchisable concepts and improve production methods (for example recycling the chicken manure). We’ll also raise and sell chickens at the farm to cover operational costs within Cambodia.
We anticipate that a micro-farm will support around 250 families to run their microfranchises. Over time, we plan to replicate this model to other regions in Cambodia and South East Asia.
We’ve now located a perfect piece of land (114m x 42m) for our first micro-farm, which is 2km from our current centre in Chhouk. We plan to build five broiler coops and a base for our project there, as well as dig a well and fence off the property for security, in partnership with local NGO World Education School.
We’re excited about this next phase and we’re inviting you to help us.
To secure the land and pay for infrastructure, we need to raise NZ$12,000 by November 2014.
We’ve already raised 10% ($1,200) of the $12,000 needed by way of a donor who has committed to match, dollar for dollar, the first $1,200 raised. That means for every $1.00 you put in there will be a $2.00 benefit, up to the first $2,400.
We’ve set up a give-a-little zero fees fundraising page - every dollar counts and no contribution is too small. To help us achieve our goal so we can help more ultra-poor people, click here to donate.
Gerard and Hana Wakefield
What better way to generate long-term improved education and healthcare for the disadvantaged than by promoting “self-sufficiency, empowerment, and personal growth.” TALKINGtech Foundation has recognised our ‘barefoot franchising’ approach which merges business and philanthropy, and has chosen to partner with us.
As a non-profit social enterprise we’re extremely grateful to partner with TALKINGtech, so we can continue providing solutions which address the actual causes of poverty.
Here’s what TALKINGtech has to say about our programme:
“The TALKINGtech Foundation actively seeks to partner with organisations using innovative approaches to deal with social and economic issues facing the underprivileged in our global community. Without a doubt Catalyst Microfranchising is one of these such organisations.
"Really delicious!" That's the verdict from customers who've been seeking out the Khmer herb & lime flavoured grilled & fried chicken at our new street food stall in Chhouk township. The stall means we can now sell chickens produced by microfranchisees in our programme direct to the public instead of back to suppliers as the only option.
We started selling grilled & fried chicken from the stall in June, and while it's early days, we're delighted with its success. Local resident Sang Sang (pictured) has been brought in to manage the venture and is currently selling around 13 chickens a day, for a 50% higher price than we can get from selling to suppliers.
Who knows, from humble beginnings maybe one day our brand will be as synonymous with fried chicken in Cambodia as a certain white-haired gentleman from America!
Click here to be part of our life changing project!
When we first started this project, it was important to know what kind of difference we would make in the lives of the ultra poor of Cambodia. It had to impact their family in a way that would break the cycle of poverty and be able to provide for their family in the most basic way, like sending their children to school, having access to medical care when required and being able to afford regular meals.
Many of our microfranchisees are already working long hours for as little as 50 cents a day and it was important that the business they were going to venture into was not going to interrupt their current main source of income. We designed a program that would only take an extra one hour’s work a day to maintain (usually completed before or after work). After our successful microfranchising cycles, we were able to compare the profit of 1 hour of work with Catalyst vs 1 hour of work at their usual job, as well as comparing how many hours it took to make the average ultra-poor monthly wage of $45:
What an amazing difference! We knew we were on to something great when we saw the difference it was making in the lives of people who need it the most.
Our team at Catalyst Microfranchising invites you to be a part of this amazing journey with us. Let’s change the world, one family at a time. Click here to find out how to be part of this project.
After their first chicken raising cycle, one group of franchisees had higher loss of chickens than other groups.
We conducted a thorough investigation to find out if this group was doing anything differently to the other microfranchisees and noted that there was a difference in disease prevention practice.
One of our profitable business owners, Heng, discussed his key practices to ensure his chicks grow healthily until the end of the cycle.
Heng’s eight keys for successful results are:
Heng’s keen to keep raising chickens through our programme and hopes his strict hygiene protocol will help others to repeat his success.
Heng made $20.66 profit in his last cycle for one hours work a day over 45 days. Many of our villagers would have to work over 20 ten hour days to make the same amount of money in their normal jobs.
If you want to make a different in someone’s life today, you can start with as little as NZD $100 and help the ultra-poor make a difference in their lives. Click here to see what you can do to help!
Our story starts with a small village in the far eastern corner of Cambodia in 2009. Volunteering for a local organisation, we’d travelled to a remote part of Cambodia to visit an impoverished rural community. Far from any roads, we’d woven through a network of dirt tracks to reach a cluster of villages. Untouched by the outside world and still recovering from nearly three decades of conflict and civil war, the villagers struggled to survive, eking out a living however they could. We’d been from house to house and seen how people were running out of rice, their staple diet. Preparing to leave, in one of those haunting moments you never forget, the village elder made an emotional plea to us to help their community in whatever way we could.
The stark reality of living on $1 or less a day truly hit home that day - the ultra-poor are risk averse, with little opportunity to improve their situation, and with no buffer in times of crisis or failure. It was a fork in the road for us. We had two choices when we came back to NZ. We could ignore the desperation of those we’d met and look after ourselves; or we could instead use our skills for a larger purpose and try and provide opportunity and hope to those in desperate need. The situation weighed heavily on our hearts as we knew it would be a long term commitment. It seemed crazy. We eventually chose the latter – seeing the utter need carried with it a responsibility in our eyes.
After a lot of trial and error it became very clear that the poor needed proven micro-business ideas, improved agricultural products, training and access to markets, along with sustainable forms of microcredit which don’t cause indebtedness. None of the development agencies was offering this package in Cambodia. Microloans were helping people at or above the poverty line; we wanted to help those below. And so we started developing a business-based programme designed to help the ultra-poor. The first step was to choose a prototype microbusiness to test – we chose chicken raising, and tested the profitability by raising our first batch of chickens at the school we’d partnered with in Chhouk. Our next step was to test it with a group of 13 villagers and find markets for the chickens. From there we’ve involved a total of 50 people and we’re continuing to grow and improve what is a unique franchising programme for the poor. We’d like to invite you to follow our story. It’s a story of starting something ‘crazy’ and the power of disrupting conventional thinking – we believe, in a smart way...
“We make a living by what we get; we make a life by what we give.”
We founded Catalyst social enterprise after living in South East Asia and seeing first-hand the daily struggle rural villagers face in meeting their basic needs.