Pooling savings provides new opportunities to expand existing businesses and begin new ones.
While Cambodia’s capital, Phnom Penh, boasts landmark lavish homes of rich government ministers, a sprinkling of new office towers and a growing tourist infrastructure, most of the rest of the country’s 15 million people live simply, relying on subsistence farming and fishing.
A two-hour drive southwest from the heart of Phnom Penh is Trapang Khna village, in Takeo province, and the roadside store of Sao Sarat and her husband Ith Tharoth. Their two sons, 4-year-old Horayu Oeun and 3-year-old Horavuth Oeun, scamper barefoot on the store’s concrete floor.
As a steady stream of customers, young and old, comes in — some getting just a cold drink, others grocery items or toiletries — Sarat shares how she has been able to build her business since joining a village savings group of Takeo Community Forestry and Integrated Development Association (TCFIDA), an MCC partner, in 2008.
Village savings groups provide a low-interest source of money to borrow, enabling people to begin small shops or establish other additional sources of income, says Derek Hostetler of Portland, Ore. He and his spouse Leakhena Hostetler serve as representatives for MCC’s work in Cambodia.
“In order to join you have to begin saving first,” Sarat explains. “Every month we each put in what we can. It might be 10,000 riel ($2.50 U.S.) or up to $50 a month or more. We pay ourselves 1.5 percent interest per month, which is a good incentive to save.”
Once people have given a certain amount to the savings group, they can begin to borrow at a rate of 3 percent per month, generally for short-term loans of one to six months.
“I started by borrowing $50 to $75 each time. But now by borrowing $300 to $500, I have been able to increase the variety of my inventory and therefore increase my customer base and sales,” Sarat says. “Every time I pay back a loan I have more profit and savings than I did before.”
In a space not too much larger than a one-car garage, Sarat has tucked a variety of inventory — baskets of salted dried river fish, cloth sacks of various beans, vats of pickles, bottled drinking water, shampoo in packets, snack foods, totes full of cold soda and soybean drinks on ice, dried noodles, insecticide, cooking oil and much, much more.
And that’s not all.
Sarat’s eyes brighten as she talks. “Have I told you about my pigs?” she asks. “I know you need to visit Takeo village but on your way back, stop and I’ll show you my pigs.”
Reaching Takeo village means a journey down increasingly remote dirt paths, more suitable for walking and bicycles than a pickup truck.
Photo by Michael Bade
In Takeo village, the store of Mom Chhoeun is much more humble, with maybe a fifth of the inventory in Sarat’s store. Yet since Chhoeun joined a savings group in 2005, she has been able to repair her house, increase her inventory and buy piglets to raise.
“But most important,” she says, walking over to a machine with hoses nearly 4 inches wide on both ends, “is this big water pump we purchased so that we can irrigate our fields.”
Her husband Khut Thon points to one of the only green fields in sight. “We not only get two rice crops a year now, where we only got one before, but my wife and I can grow a third vegetable crop as well.”
In the field Chhoeun pulls up one of the plants by the roots. “See. Peanuts.” She smiles and holds out a bunch. The field holds hundreds of peanut plants, each with 20 or more peanuts under the ground.
That represents a lot of protein in Cambodia, where according to the United Nations 40 percent of all children are chronically malnourished, the bulk of those in rural areas.
“The village savings group has made a huge difference to our family,” Chhoeun says. “I don’t know where we would be without it.”
Back in Trapang Khna village, Sarat walks from her store across the street to her pig shed. She says she started with one piglet. “I wasn’t sure if I knew how to raise one, if it would live or die,” she says. “So the next year I bought three piglets and the next more, and now I have 23. I time them so they are mature right during the Cambodian and Chinese holidays. That way I get maximum value.”
“I am so thankful to the backing of MCC to help support the village savings group,” she says. “It has made a real difference in many people’s lives.”
Of the 32 participants in her group, 28 are women, she tells me.
“It has given us hope for the future,” Sarat says. “Myself, I hope to one day become a wholesaler, which will save people in our village even more money. But that is a ways away. I have a lot to learn before then.”
Michael Bade of Seattle, Wash., is an MCC worker in Cambodia.