Gold shops do brisk trade in Cambodia, where confidence in cash has yet to erode traditional attitudes to the precious metal, which for many is still seen as the best preserver of wealth.
Like many rural Cambodians, San Sophaly still feels safer putting her savings in gold, an age-old practice that has helped many in this impoverished country weather political or economic upheaval.
“My husband and I have agreed to put our savings into gold, and then, whenever we need to buy equipment, we can sell it,” said the 45-year-old farmer from Kandal province.
Microfinance institutions aimed at helping lower-income Cambodians either secure loans or better manage their money still present some difficulties, she said, explaining that she had trouble withdrawing money from a savings account opened at one micro-lender and closed the account out of frustration.
And the uncertainty of Cambodia’s recent past has made her hesitant to depend solely on cash.
“Once the country falls into crisis, payments have to be made in gold,” she said.
Cambodia’s rapidly expanding banking sector is reaching deeper than ever into the countryside, with more bank branches opening in remote provincial towns.
But gold – often in the form of small pieces of jewelry – remains the currency of choice for many.
“We are poor. We don’t have enough money to put in a bank, but we can save enough money to buy a small amount of gold jewelry, like earrings,” said 51-year-old Nhim Touch from Kampong Cham province’s Batheay district.
“We can wear it until we need the money,” he said, “and then we can sell it fast.”
Rising inflation and the de-valuation of the US dollar makes gold more attractive to many Cambodians who do not have large sums of cash.
“I think putting money in a bank is the same as throwing it in a fire,” said Kang Chandararot of the Cambodian Institute for Development Studies, adding that bank interest rates were currently too low to generate enough interest in savings accounts.
“People putting their money into gold jewelry is the best way to save,” he said.
Jeweler Heng Chhay Tith who works near Phnom Penh’s Central Market said he thought more than half of Cambodian farmers spent their profits from their crops on gold. “It’s easier to look after than cash.... People have shifted to save gold instead of money – they buy more gold because they hope that it will gradually increase in value.”
But some see this fascination with gold as a lack of awareness of Cambodia’s emerging banking sector – and the relative safety it provides – rather than good fiscal policy.
“They just don’t understand the policies of depositing and withdrawing money,” said Touch Vanneath, marketing manager for the Prasac Microfinance Institution.
Others see gold as too much of a liability, making them a target for theft.
“Once, I almost went crazy after burglars had broken into my house and robbed all my gold, about 187 grams,” said vendor Nouv Ranthna.
“I really think people buy gold for its beauty, not for their savings or to try to earn a profit.”
The high costs of precious metals on the global market have also dampened sales in Cambodia, where one damlung of gold costs $1,030 (26.67 damlung equal one kilogram).
While it is unclear how much gold is imported into Cambodia for sale, 277 licenses for gold merchants were issued in Phnom Penh last year, according to the National Bank of Cambodia’s annual report. An additional 2,963 licenses for gold vendors were issued for the provinces during 2007.