Helping communities in Cambodia save for change

When Sean Ing first heard of "Saving for Change" in January 2009, she was skeptical. But Ing had a big expense coming up - her daughter's wedding, which she wasn't sure how to fund. Ing owns 1.5 hectares of farm land, but it takes her half a year to harvest the rice and she had limited access to banking services. So she decided to listen.

"First I decided to just listen to what the trainer had to say about saving money. Then it got more interesting, and I thought I would want to give it a try," the 53-year-old thin, jovial farmer said.

Then Ing found out Saving for Change allows members loans not only to solve short-term credit needs, but also to expand their income sources such as by raising livestock and growing vegetables.

She decided to join a savings group to help address her family's financial difficulty.

Ing lives in Bantoat Bos, a village some 400 km from the Cambodia's capital, Phnom Penh. People in Ing's village depend heavily on rain-fed agriculture for their living. The majority grow wet-season rice. During the dry season, some migrate to other provinces and some cross the border to look for work in Thailand.

Many are poor, earning less than a dollar a day. And like many poor Cambodians, most villagers in Bantoat Bos consider themselves too poor to save money.

The Saving for Change program aims to address this misconception.

Never too poor to save Five men and five women in Ing's village started their Saving for Change group in mid January 2010. With the support of a trainer, they established group rules, selected group leaders, and named their group Bantoat Bos Prosperity.

This group meets and saves three times a month, and members can borrow money at the second meeting of every month. When the group meets, each member puts in savings ranging from 5,000 Riels ($1.25) to 15,000 Riels ($3.60) into the group's savings box.

In January, Bantoat Bos Prosperity saved 305,000 Riels ($75) and Ing was the first beneficiary. She borrowed 300,000 Riels to prepare meals - buying chickens, pork, and vegetables - for her daughter's wedding.

According to the group's rules, Ing will pay a two percent interest per month, and she has three months to pay back the loan. That will give her enough time to harvest and sell her rice.

The Saving for Change program shows poor, rural communities how to save their money as a group and make small but important loans to each other. Members of Ing's group act as their own community bank - they save, lend, and pay each other interest.

This approach has helped Ing and thousands of other Cambodian families to reduce dependency on credit providers, moneylenders, and intermediaries who would demand collateral like land titles and charge high interest.

From small savings to big changes During an Oxfam's recent visit, all 10 members of Bantoat Bos Prosperity gathered under the shade of some banana, coconut and mango trees. They sat in a circle on a blue plastic sheet and began their group meeting.

Everybody had some money to save. Ing handed over 10,000 Riels ($2.50) for savings and 6,000 Riels ($1.50) to cover the interest on her loan.

These savings are tiny amounts but they add up over time, and in return, can help people like Ing overcome financial difficulty and bring changes in their lives.

They also teach Bantoat Bos Prosperity members basic skills in managing financial resources.

In Cambodia, the Saving for Change program has been helping people in Banteay Meanchey and Preh Vihear provinces since 2009 to work their own way out of poverty.

Since Oxfam America launched the program in Mali in 2005, it has spread to three other countries - Senegal, El Salvador, and Cambodia - and is reaching 351,000 families who have mobilized savings of more than $6 million.

Working with local organizations in Cambodia such as RACHA and Save Cambodia's Wildlife, Oxfam America has formed Saving for Change groups for 41,000 people and about 80 percent of them are female. The organization expects to reach 91,000 Cambodians in the next three years.