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Small savers need banks

Small savers need banks

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.

Brett Matthews

Canadian Cooperative

Association

Vong Sarinda

Cambodian Community

Finance Network

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