Social Performance Management

How does LOLC translate its policy into practices and impact? Find out more in this section where it showcases the effective translation of an institution’s mission into practice that inline with the accepted social values. LOLC implements the integration of Universal Standard of Social Performance Management into its policy, procedure, training, internal control and implementation.
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1. How do we translate our mission as of December 2020?

As reflected in the institution’s values, LOLC is committed to provide financial services to people with disadvantages in society which include customers especially female customers who earn around or below the national poverty line. It also includes customers that come from important sectors (34 percent of LOLC customers are agriculture and 15 percent are from services) who are looking for financial opportunity to improve their livelihood.

2. Measuring LOLC’s Social Goals

3. Implementing Universal Standard of social performance Management (USSPM)

- Define and Monitor Social Goals:

LOLC has defined social goals and is continuously monitoring the performance of social activities against
targets, and this data is reported quarterly to the management team and Board of Directors.

- Ensure BOD, Management, and Employee Commitment to Social Goals:

The Board of director and the Management of LOLC are accountable for the mission and social goals of
the institution. The staffs know and understand the social goals of the institution. And staff performance appraisals include performance-based social activity indicators.

- Design Products, Services, Delivery Models and Channels That Meet Clients’ Needs and Preferences:

Unsecure loan, secure loan, leasing, saving, and convenience repayment (through agents), and multiple
choices of currency and repayment options.

- Treat Clients Responsibly:

LOLC is a microfinance institution that has received the Certificate of Consumer Protection Practices (CPP) in
June 2015. Then, in September 2019, LOLC received a Certificate of Compliance with the Client Protection Principles.

- Treat Employees Responsibly:

LOLC provides employees with a right environment, good communication, staff safety considerations, and benefits to staff such as training, year-end bonuses, increase annual salary, health benefits (medication and hospital stays), incentives for CO/RM/DBM/HCO, other compensation, etc. Besides, LOLC routinely surveys employee satisfaction or dissatisfaction and reports to management and board of directors annually. LOLC complies with all applicable labor laws.

- Balance Financial and Social Performance:

LOLC has clearly defined social & financial goals and strategies to achieve them by maintaining the

sustainability of the institution and its clients. In addition, LOLC has implemented reliable financial
service delivery. And to ensure the performance of staff, LOLC incorporates both social and financial performance indicators into the performance evaluation of all staff.
4. How LOLC implements responsible finance and 7 client protection principles?

SOCIAL DRIVEN MISSION

Mission Statement: LOLC (Cambodia) Plc. (LOLC") is a microfinance institution with a social vision and
a business orientation that provides entrepreneurs and families at the base of the socio-economic
pyramid with the economic opportunities to transform the quality of their lives and their communities through the provision of effective and sustainable client empowering financial services.

SUSTATNABLE FINANCE

FSS: 128.68%
ROE: 25.82%

Green Lending: 8.6K clients having US$ 20M portfolio recognize as Green Lending. Environmental and social impact assessment for large loan size.

WASH Loan: 8.3K clients (USS 3.2 M) access to better sanitation and clean water

REGULATION COMPLIANCE

Good Corporate Governance
Compliance to Prudential Regulation: Credit risk; solvency, liquidity, large exposure.
Compliance to Regulatory Requirements: taxation, disclosure, ethics, risk management etc.

EMPOWER FIANANCIAL LITERACY

Due to Covid-19 crisis, some activity were postponed but 12 short financial education videos were produced
to promote financial education awareness to clients and audiences. All videos were produced and post on the popular mass media and LOLC page. As of Dec 20, 12 videos reached about 8M viewers.

INCLUSIVE FINANCE

PPI: LOLC is a certified user. Outreach: 27.10% of new group loan clients are very poor and poor categories. Branches: 79 branches in 25 provinces
Accessible to saving: 402K depositors with a portfolio of US$ 536 million.

Outreach to rural clients: 93%, Urban: 7%
5. How LOLC translates Sustainable Development Goals (SDGs) into implementation (as of December 2020)?

Like other institutions, LOLC relies on the Sustainable Development Goals (SDGs) as the blueprint for growth, successes and performance’s indicators. As one of the biggest microfinance institutions, LOLC (Cambodia) Plc. is committed to eradicate poverty (Goal 1) through its services and products, improve gender equality (Goal 5) via
its focuses on women customers, clean water and sanitation (Goal 6) through its outreach program, affordance and clean energy through its credit services and partnership for the goals (Goal 17).
6. Social Product

a. GREEN LENDING
Currently, LOLC is offering Green Lending both leasing and loan through its existing products such as Life Improvement Loan (LIL), and Life Improvement Loan Asset Back (LILAB). LOLC received technical assistant from ResponsAbility including the tool to measure the impact of Green Lending on CO2 emissions and energy saved.
As of Dec 2020, 8.6K clients are using Green Lending product with gross loan portfolio, US$ 20 millio As the result, at the end of 2020, LOLC was chosen as the outstanding institution in providing Green Lending and handing the award by GCPF The dashboard below which tells you the save of emission saving (t CO2) and energy-saving (MWh) through its green lending.


b. WASH Loan
LOLC started serving clients with WASH Loan products since 2016.
The WASH Loan helps clients to improve water access, sanitation and hygiene in their community.
Target clients are those in good standing with LOLC who want to build or renovate latrine, well,
pond digging, water storage or buy a water filter, etc.
As of Dec 2020, 8.3k clients are using Wash Loan product with gross loan portfolio, US$ 3.2 million.


c. HOUSING Loan
LOLC offers Home Improvement Loan (HIL) to their clients who want to fix or renovate their existing house since 2016. In 2019, LOLC has developed a new convenience product called Housing Loan (HL) for the clients who want to build or buy new house. As of Dec 2020, LOCL is offering HIL and HL loan to 9.8K clients of USD 50 million gross loan portfolio.

Relevant Social Goals	Annual Measurable KPIs	Annual Target	2018	2019	2020
Increased access to financial services	Number of borrowers in rural areas	>= 85%	93%	92%	93%
Number of borrowers involved in agriculture	>= 30%	46%	39%	34%
Percentage of female borrowers	>= 67%	72%	70%	70%
Poverty Outreach	Percentage of new group loan borrowers below 150% National Poverty Line	>= 20%	29.62%	29.40%	27.10%
Environmental Sustainability	Result of environmental assessment in Monitoring	Monitoring	Medium Monitoring	Medium Monitoring	Medium Monitoring

7. Environmental and Social Assessment

8. Measuring Poverty Outreach through PPI

Poverty Probability Index (PPI) is an indicator to measure LOLC Cambodia outreach to the disadvantages customers, to determine the transformation of the quality of client’s livelihood, and to ensure that appropriate products are extended to the right clients. Using PPI, LOLC can choose its categories of the client as below:
9. Consumer Right

LOLC is the legal institution that has the bright vision, mission and core value. Furthermore, LOLC highly focuses on providing the good financial products and services to the clients. All LOLC clients are offer the right as below:
    Know and understand product terms and conditions and all costs before disbursement.
          Refuse to accept any product.
          Complain or ask questions about any service or product offered by LOLC.
          Receive the loan schedule and other important documents upon (or before) disbursement and official receipts during loan repayment.
          Receive fair and respectful treatment, no discrimination, from LOLC’s staff.
          Expect LOLC to keep personal and financial information confidential.
The client are clearly informed about their right before or after loan disbursement. It is also mention on the loan plastic bag
10. Financial Literacy Video

Financial Literacy Video

Due to Covid 19, financial literacy awareness in-class training was postponed and 12 short financial literacy videos were produced to deliver the financial literacy messages, consumer protection, self-motivation, and small business management to rural people to the audience by posting in the popular mass-media Facebook page and LOLC Facebook page. As the result, the videos reached to 8 million audiences.
11. Other Social Activities

1. The Covid-19 Crisis Supporting

To contribute to the Cambodia Government in the Covid-19 crisis, LOLC has donated KHR 40,000,000 to the National Committee for Covid-19 Disease Control. For the client, LOLC provided some foodstuff to 790 clients whose economy affected during this bad situation. After the recovery situation, LOLC also donated USD 100,000 to the government for the Covid-19 vaccine expense.

2. Anti-drug leaflet

Recently, LOLC (Cambodia) Plc. has supported the publication of 100,000 Anti-drug brochures. In the pictures below, LOLC showed its commitment by delivering the brochures to Mr. Lim Tong Hout, Director of the Department of Legislation Education and Rehabilitation of the General Secretariat of the National Authority for Combating Drugs. LOLC believes the leaflet will contribute to drug trafficking prevention and drug use.

3. Donations to Customers and People affected by flood

LOLC has a vision of helping people live with dignity, safety, social connection, economic stability and justice. This year, LOLC branch donated rice and noodles to three provinces include Batambang, Banteay Meanchey, and Pursat for supporting to the people who negatively impacted by flooding.

Environment and Social Assessment	# of loan	Remarks
Low	87	- Client’s risk management quality is high - Client risk level is low Therefore, no action taken is required
Medium	83	- Client’s risk management quality is ranged from medium to high - Client risk level is ranged from low to medium Therefore, monitoring should be tracked to see the progress of the risks.
Total	170

LOLC (Cambodia) Plc. has been serving Cambodian public and society for over 26 years, and has been recognized by both local and international financial authorities. Our products and services are committed to improving the livelihood of Cambodian customers.

#666B, Street 271, Kbal Tumnub Muoy Village, Sangkat Boeng Tumpun 2, Khan Mean Chey, Phnom Penh, Cambodia.

023 991 991

[email protected]

Reports

Social Performance Management

- Define and Monitor Social Goals:

- Ensure BOD, Management, and Employee Commitment to Social Goals:

- Design Products, Services, Delivery Models and Channels That Meet Clients’ Needs and Preferences:

- Treat Clients Responsibly:

- Treat Employees Responsibly:

- Balance Financial and Social Performance:

SOCIAL DRIVEN MISSION

SUSTATNABLE FINANCE

REGULATION COMPLIANCE

EMPOWER FIANANCIAL LITERACY

INCLUSIVE FINANCE

1. The Covid-19 Crisis Supporting

2. Anti-drug leaflet

3. Donations to Customers and People affected by flood

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