Building each other up, one month at a time

In northern Cambodia, where CWS team members support our Promoting Better Lives project, a group of women have been meeting monthly for several years now to review and discuss their shared savings through Robonh Samaki (“Village Solidarity” in English), which is one of 49 similar groups that CWS supports.

When families in the village need cash, they know there are money lenders and even local microfinance institutions to approach. But most people dislike both options because loan terms are onerous and they feel it is too risky to use their scarce assets – a cow or their land – as collateral.

To help address this challenge, which is a perennial one in Cambodia, CWS has worked through the years to help villagers, women and men alike, start savings and lending groups which use mutual trust as their collateral.

Robonh Samaki was formed when the Village Development Committee members shared information about the possibility and benefits of such a group, and then called for volunteers to form groups. The group members learned from CWS how to run the group: setting rules, learning basic bookkeeping and electing leaders. The women who formed Robonh Samaki wanted the chance to learn more about ways to save. They also wanted to have the opportunity to borrow money to start or expand their micro businesses and home gardens or pay for their children’s education or an emergency. Some wanted to save for a ‘rainy day.’

With the closest bank being more than an hour away – and even if they went to bank, it wouldn’t offer affordable loans – the group also gave the women a low-cost alternative to earn interest on their savings. There is no minimum amount to join the group, but then each member must deposit the equivalent of $2.50 to the group on the first of each month. The group savings pool then earns interest on the total deposits and loans out to members. For example, if someone borrows $25 for three months she repays 50 cents interest each month to the group savings pool, and the $25 at the end of the three-month loan term. Term lengths can vary, but the interest rate stays the same.

The 13 founding members of Robonh Samaki have built security nets for their families and made money available to invest in improving their livelihoods and well being. The group happily reports that they have never had any one default on their loans.