Field visit to Kampong Thom Province reinforces the value of financial capability training for sustainable livelihoods

Field visit to Kampong Thom Province reinforces the value of financial capability training for sustainable livelihoods

Maneth Pol, CAFE Program and Partnership Officer

Alongside long-term partner Chamroeun, Nirri Shah (CAFE Program Manager) and I recently had the opportunity to join a community field visit to Kampong Thom. We travelled to Kampong Thom to see Good Return’s ‘CAFE’ financial coaching program in action with agriculture Cooperative members. During the visit, we learnt about the challenges facing small-scale farmers and the important role that financial literacy can play in supporting financial decisions in household and business management. By the end of the visit, it had become clear that financial capability training can have a significant impact on creating sustainable livelihoods and businesses in the agricultural sector.

During the two-day monitoring visit, we observed the progress of four different learning groups in which 32 participants (29 women and 3 men) fully participated in the financial coaching program in Kampong Kou commune. After session 3 was conducted by one of the Chamroeun coaches, several of the participants happily shared their learning experiences. This was a real highlight and insight into the impact of the program.

Several of the participants explained that, so far, the program has helped them to have a better understanding of money management and financial products. In particular, they now have a greater awareness of saving and preventing over indebtedness. They also spoke highly of their coach, Vy Chhun Ey, who encouraged them to record their finances in the weekly money tracker. He had highlighted their rights and responsibilities in choosing the financial products and services offered by formal MFIs or Banks. This was all new knowledge to the participants.

After hearing about their CAFE program learning journey, I quickly felt inspired to interview one of the participants: Mak Vanna. At first, Vanna talked to me about his own difficulties in financial management. Without transaction records in the past, he couldn’t control his expenses and income. It was also difficult to effectively delineate between his family and business funds. 

However, Vanna was pleased to explain to me that since he had started using the weekly money tracker, his spending habits had completely changed. In particular, he was proud of the fact that he had shifted his behaviour and felt equipped to manage the profit and loss in his rice selling business. He was also now making shared financial decisions with his wife.​ Vanna wanted to recommend this program to other people in the village.

We learnt more about vulnerability and financial safety in the agricultural sector more broadly. At the Santuk Agriculture Cooperative, the head of the association spoke about how the majority of their members were at regular risk of taking out loans from informal money lenders because they do not ask for as many documents as formal financial institutions. For this group of farmers, who are unlikely to have formal banking history, required documentation or collateral, this can initially seem like an appealing opportunity. However, this gives the informal lenders undue and unregulated power in the lending relationship and puts the farmers at risk of financial exploitation. Indeed, throughout the visit, we learnt that the majority of members were unaware of the financial products, or reliable financial institutions available to them in their area. Whilst these farmers require access to finance to build business, they continue to find the process very complicated.

Overall, the more participants we spoke to, and the more we got to know the local community, we felt that the CAFE program has the potential to create positive impact for agricultural cooperative members across the country. At present, the financial literacy rate of farmers in Cambodia sits at just 18% (National Financial Inclusion Strategy 2019-2025). In practice, this means that only 18% of farmers in Cambodia have adequate knowledge and skills to make sound financial decisions. Research shows that farmers who lack financial literacy are more likely to make poor financial decisions, such as taking on too much debt or investing in risky ventures. Compounding this is the fact that the agricultural sector in Cambodia is vulnerable. Many farmers or households living in the areas face challenges in terms of low productivity, lack of access to markets, and limited access to credit. The impact of climate change is also becoming clearer as crops become less reliable and natural disasters increase.

With the vision of supporting farmers and the agriculture sector in Cambodia, I am excited to be a part of the Good Return team that strives to build the confidence of and economically empower farmers through financial capability, access to financial products, digital competency and providing services with our partners.

Good Return’s CAFE Initiative is delivered in partnership with the Australian Government through the Australian NGO Cooperation Program (#ANCP).