Partners. In Collaboration with:

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2 Partners In Collaboration with: Université Libre de Bruxelles / Belgium ESCEM / France ESC Dijon / France Sciences Po / France Freie Universität Berlin / Germany Leibniz Universität Hannover / Germany Eberhard Karls Universität Tübingen / Germany Rjiksuniversiteit Groningen / The Netherlands Frankfurt School of Finance and Management / Germany Università Cattolica del Sacro Cuore Milano / Italy Università degli Studi di Bergamo / Italy Università degli Studi di Roma La Sapienza / Italy Universidade Católica Portuguesa / Portugal Universidade Nova de Lisboa / Portugal European Microfinance Platform (e-mfp) We thank the following professors and practitioners for having participated in the Selection Committee: Michael Anthony (Allianz SE), Luciano Bonomo (Università degli Studi di Bergamo), Barbara Fritz and Ursula Stiegler (Freie Universität Berlin), Oliver Gloede (Leibniz Universität Hannover), Noara Kebir (Microenergy International), Hansjorg Kessler (FIDES), Stephan Klasen and Ahmad Nawaz (Georg-August Universität Göttingen), Fabrice Mauleon (ESCEM), Vanessa Mendez (PlaNIS), Fernando Rodríguez (Universidad de Salamanca), Hans Dieter Seibel and Stefan Karduck (Universität zu Köln), Roberto Visconti (Università Cattolica del Sacro Cuore Milano), and Claire Crochemore, Oumarou Diallo, Yann Hirlimann, Mohamed Maarouf, Stephan Pieron and Umberto Trivella (PlaNet Finance) With the Financial Support of: With Kind Support of: Allianz SE, BNP Paribas, Frankfurt School of Finance and Management and Dexia Kommunalbank Deutschland AG supported UMM activities (workshop, scholarship) Collaboration with European Microfinance Platform In 2010 the European Microfinance Platform (e-mfp) has set up an e- MFP Action Group University Meets Microfinance for practitioners to work with European universities and further enhance students research and microfinance professionalization.

3 UNIVERSITY MEETS MICROFINANCE edited by PlaNet Finance Deutschland e.v. ISSN The University Meets Microfinance programme (UMM) presents its third UMM Award : Each year, the UMM Awards honour outstanding theses on microfinance and give recognition to the work of young researchers. The UMM Award winners are selected by a committee of professors and microfinance practitioners, to recognise theses presenting innovative research topics and approaches. Microfinance has gained scale and recognition over the last decade. Today, Microfinance Institutions reach approximately 150 million low-income people who were previously excluded from formal banking systems, with financial services which include credit, savings, insurance and money transfer. This rapid expansion has also come with increasing challenges. Research on microfinance provides new insights into these challenges and can foster innovation in the sector. In 2009, 720 practitioners, students and professors from 14 universities of the European Union participated in UMM. The programme is co-financed by the European Union and was initiated by PlaNet Finance and Freie Universität Berlin with the aim of strengthening the cooperation between European universities and microfinance practitioners. In addition to promoting research publications, UMM offers microfinance seminars in partnership with European universities, mentorship and field research scholarships for Bachelor, Master and PhD students, and organises regular workshops with UMM participants. Volumes More information can be found at and 2 Thilo Klein Microfinance 2.0 Group Formation and Repayment Performance in Online Lending Platforms During the US Credit Crunch ISBN Saikumar C. Bharamappanavara The Performance Of Microcredit Organisations A Comparative Perspective ISBN Oliver Rogall Microfinance and Vulnerability to Poverty The Evidence from Rural Households in Cambodia ISBN

4 Oliver Rogall MICROFINANCE AND VULNERABILITY TO POVERTY The Evidence from Rural Households in Cambodia ibidem-verlag Stuttgart

5 Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über abrufbar. Bibliographic information published by the Deutsche Nationalbibliothek Die Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at Gedruckt auf alterungsbeständigem, säurefreien Papier Printed on acid-free paper ISSN: ISBN-13: ibidem-verlag Stuttgart 2011 Alle Rechte vorbehalten Das Werk einschließlich aller seiner Teile ist urheberrechtlich geschützt. Jede Verwertung außerhalb der engen Grenzen des Urheberrechtsgesetzes ist ohne Zustimmung des Verlages unzulässig und strafbar. Dies gilt insbesondere für Vervielfältigungen, Übersetzungen, Mikroverfilmungen und elektronische Speicherformen sowie die Einspeicherung und Verarbeitung in elektronischen Systemen. All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronical, mechanical, photocopying, recording or otherwise) without the prior written permission of the publisher. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. Printed in Germany

6 Abstract Low income households are faced with various types of risks, increasing their vulnerability to poverty. In Cambodia, conditions of the rural poor - with the majority engaged in agriculture - are characterized by low productivity, limited capacities in terms of land and assets, volatile income sources, fluctuating farm input and output prices, debt and lack of credit worthiness. A microfinance institution operating in rural Cambodia and aiming to offer financial products to a large number of poor households is Angkor Mikroheranhvatho Kampuchea (AMK) Co. Ltd. Through its internal Market and Social Research Department, AMK staff annually collects socio-economic information about selected loan clients (household profiles, cash-flow analysis), as well as non-clients as a control group. Their survey tool includes questions about household s food consumption, main risk sources and coping strategies. The present research study draws information from this AMK survey database. The measures taken are applied to socio-economic cross-sectional data as of 2006/07 and validated with panel data from A theoretical framework is developed to examine the mechanisms through which the effects of the AMK services on its clients influence the household s ability to manage risk. It includes measurement aspects of a forward-looking concept of vulnerability to identify and capture its linkages to risks, shocks, and risk strategies of rural households. Secondly it incorporates the dynamic aspects of poverty by looking at temporal changes in absolute poverty levels. Moreover, it seeks to identify gaps and opportunities of microfinance services as a risk management strategy to reduce vulnerability. The results show that the fraction of vulnerable households (85%) facing a risk of poverty is considerably greater than what the static poverty assessment suggests. Results further show that the majority of the sample households are poor (72%) as of 2006 and Among the non-clients the figure is substantially lower with 58% poor households, whereas 75% of the AMK microfinance clients fall below the poverty line. This particular confirms the intended outreach targets of AMK. Furthermore, it could be ascertained that those clients who remained clients could significantly accumulate assets and became less dependent on agricultural activities. This is a good indication that AMK clients have safety nets and more strategic possibilities in case of future shocks.