Towards Safety and Self-reliance: Community Finance and Public Trust in Rural Cambodia

Presenting good practices that meet the savings and trust needs of poor rural households

This study by the Canadian Co-operative Association (CCA) highlights good practices that can meet the savings and trust needs of poor rural households in Cambodia, such as supporting more effective community ownership, better financial service delivery strategies, and new product development. It explores the case that addressing the key gap of low institutional capacity in MFIs and community finance institutions (CFIs), will resolve the problem of weak savings mobilization and service delivery in remote and rural areas.

The primary goal of the study was to list ways to build trust and a sense of security in community finance schemes in the minds of the public. The study also listed few of the major hurdles to achieving these goals, such as:

Lack of auditing systems;
Lack of trust among people;
Preference by people for using the informal sector to save and to borrow;
Traditional village - outsider conflict, where in resolution does not support shareholders rights in CFIs;
Low illiteracy rates; and
Lack of accountability in CFIs.

The study concludes by recommending a series of steps to both donors and practitioners, to help achieve these goals.