It's sad to hear people from microfinance institutions - institutions founded to
deliver quality financial service at a profit to poor people - say they can't offer
small-balance savings accounts to the rural poor because they're "not charities."
Perhaps these people are haunted by old ghosts. Not only do we not criticize them
on this count, we would quickly defend their right to make a reasonable profit.
Maybe this closed-minded way of thinking explains why CGAP, the world's microfinance
think-tank, last year found a deplorable absence of retail savings services in Cambodia,
especially for rural farmers.
It is now generally agreed that safe, flexible savings services are vital to poor
farmers' efforts to manage vulnerability and build sound foundations for their climb
out of poverty. The draft Financial Sector Blueprint for Cambodia does not address
this issue, but many people both here and abroad are concerned about it.
Next month, 2,000 microfinance practitioners from around the world are gathering
in Canada for a Microcredit Summit, tasked with the urgent need to reform practices
to truly address the needs of poor farmers.
The practices required to deliver safe savings profitably in rural villages are known
in the microfinance world. They start with village-based organizations that are funded
and staffed by villagers, then networked nationally for supervision, audit, technical
assistance and other common services. This approach builds human and institutional
capacity village by village, instead of concentrating all the jobs and opportunities
in a few big cities.
Many Cambodians share this vision of thrift, safe savings and village self-reliance.
The Cambodian Community Finance Network (CCFN) represents 54,000 retail villagers
around rural Cambodia.
This movement is deepening village capital markets and teaching villagers how to
manage sound institutions. It's exposing villagers to the life possibilities that
open up when useful financial services are available, and the profits from delivering
them stay in their village and pay for local employment. CCFN invites the government,
the donor community and all interested Cambodians to join us in this private sector
fight against rural poverty.