Country: Cambodia

Organization: Veal Pong Rural Village Bank

3) Strategy Summary:
The World Vision International-initiated village bank goes far back to 1986. The bank has its mission to serve people in the entire commune of Veal Pong, Ouddong district, Kampong Speu province, Cambodia. It is owned by the community, but under the management of two bodies – the Commune Central Committee and Village Bank Committee. Put together all village bank funds in the commune as a whole now, there are more than 150 million Riels (about USD37,500) available for people's access to get loans.

World Vision has withdrawn its financial and technical supports from the bank since 1999. Since then, it has continued to function independently. It has been able to sustain until today with strong support of their members.

4) How the Strategy Works:
This concept of rural village bank was initially reluctant because people have never been involved in such activities coordinated by outsiders. Also, people are accustomed to exchange of labors to work on the rice farms, but not involved with money matter in a big people's movement like this.

Through promotion, discussion with people as well key community leaders, this concept was adopted. It certainly takes months to share the ideas with people. Then, call for a village level meeting where intersted people come to discuss and share some more concerns and questions.

Following the agreement by many villagers, the village bank committee was set up to manage the operation at their respective village. At the same time, the commune central committee was also organized to supervise the entire process of village bank formation. Of note, these processes was under the monitoring support of World Vision, an international non-governmental organization working in Cambodia.

After these processes are completed, the World Vision International sends in the seed capital to the Commune Central Committee for equitably sharing to each village bank in the commune. At that time, the seed capital to each village bank varied, but as little as 350,000 riels (large enough for members in during the end of 1980s, but now this amount equal to about USD80). With this amount each village bank earned their interests that keep accumulating their village bank fund to support the needs of members.

Additionally, one of the village in the commune was just establised in 1992 after the repartriation of the refugees from Cambodian-Thai border. So, the commune central committee of village bank has put its effort to help this village, as part of its expansion, by involving with village leaders and inject the reserve amount of fund at the central level to help this village. Of note, this is initiated by the effort of Commune Central Committee alone, as external support had been withdrawn.

So, to this extent, the village bank under the management of two level bodies have moved themselves independently to serve the needs of their members in the entire commune.

5) Key Strategy Elements:

i. Mobilizing Citizen Support:
All the people in the village are the members of the village banks and so they are eligible to borrow loans from the bank at the agreed date. Their active supports in availing loans and returning capital and interest make the bank able to function on its own until today.

ii. Generating Financial and Nonfinancial Resources:
The financial resources are generated through regular interests earned from loans to members. Of note, the interest rate is decided by by all members. For example, initially the rate was 5% per month, then very recently it has brought down to 3% per month in stead.

What is interesting here is about members' desire to use portion of the interest earned for community development. For example, they have used for buying funiture (tables and chairs) for primary schools in the commune and digging school wells. Also, they have used this to partially fund the training workshop organized by some NGOs in their community.

6) Increasing Self-sufficiency and Social Impact:
Leadership, management with accountability and transparency had won over people's willing to be members of the bank. This is where major trust building has come forth. Additionally, meeting and information dissemination has great impact on trust as well.

People's trust has contribute to the continuity of the village bank through their active loan taking and repayment. The interests earned were used to cover administraive expenses, stipends for the two level committees, and travel cost of the committee member to attend the workshop or training outside their commune. But what more interesting is the use of some portion of intersts earned to support the community development activities such as furniture, well digging, etc.

So, the village banks have sustained on its own until today. This is certainly an incredible effort of the local people to fight poverty in their communities.

8) Organization Mission and Vision:
Vision: A self-reliant and dignified community with progressive and sustainable acess to resources for better quality of lives.

Mission: To build trust amongst community members by ensuring equal access to use of resources, ensure transparency and accountability, networking with other agencies

Contact Information:
Il  Oeur
Advisor to Veal Pong Rural Village Bank
Veal Pong Rural Village Bank
# 30, St. 348, Group 39, Boeng Keng Kang 3, Chamka
Cambodia
Tel: 855-16-894628
Fax: -
Email: iloeur1@yahoo.com
Website: -