Cambodia: Microfinance Institutions Propel Financial Literacy in Rural Areas
Cambodia, April, 23 2019 -
Microfinance institutions in Cambodia are playing a dual role in the rural economy by providing much needed funding for business as well as promoting financial literacy.
Okhna Dr. Bun Mony, Deputy Chairman of Cambodia Microfinance Association, told The Post that rural folk have strongly supported such institutions in the kingdom because of these two important roles they play.
“Promoting financial literacy in Cambodia is very important because we found that many people don’t know how to use or manage their finances in their families. Sometimes we were dismayed on hearing stories of people being alleged cheated by unscrupulous companies and individuals.
“If the people in rural area do not have sufficient knowledge in financial management, they may run into trouble by making poor decisions. They take loans from banks or from microfinance institutions and later on, they suffer the consequences of a bad decision. If we can promote financial literacy among the Cambodian people, it will be the best way to educate the public and help grow rural industries,” he added.
Dr. Mony, who is also the CEO of Vithey Microfinance PLC, said that microfinance institutions, are doing their best to promote financial literacy in rural areas.
“We are trying to promote and upgrade the living standards of the people in rural areas. I think that financial literacy in Cambodia is very important for everyone to improve and rebuild the kingdom.”
He also added, “Knowledge in finance is a very important tool for households and family members.This is to ensure that we should know how to manage our family finances in our family as well.If the Cambodian people have knowledge in financial literacy,we believe that the country will move forward smoothly.”
In terms of managing finances, Cambodia is still quite new at the task. As such, Dr Mony said, MFI is trying to promote and support financial literacy in Cambodia.
“We believe that if Cambodians know how to manage finance in their families, we would have succeeded in one of goals. Every financial institution in the country is trying to promote this among the people. We strongly believe that in order to rebuild Cambodia, we need people to know enough about finance so that it is easier for us to do our jobs well.
Dr Mony said that MFI is utilising various methods to to promote financial literacy and education in Cambodia.
“We are focusing on adults in rural areas. One of the ways to encourage learning is by inviting popular artists like singers and comedians to do help in this effort. We also have CDs sent out to the public.
According to Dr Mony, efforts are underway to introduce financial education into the school curriculum.
“We have frequent discussions with the top leaders on ways to promote financial literacy in Cambodia. By adding ingredients of financial education in primary and secondary education, we can inculcate literacy among students. They will in turn educate their parents or family members. This will help prevent school children and their families from falling victims to scams.”
He said that many in the past were cheated and lost money because they lacked knowledge in managing finances. Knowledge in finance, Dr Mony said, is important for all Cambodians in helping to move the economy.
He said that he strongly supports efforts by the National Bank of Cambodia (NBC) in promoting financial literacy through the Women’s Affairs Ministry and Ministry of Education.
“The private sector is doing a good job in promoting this important subject. However, more has to be done. Financial education and literacy is not being promoted aggressively enough throughout the country. We believe that in the near future, this subject will be inculcated in the education curriculum and MFI is helping to promote financial literacy in Cambodia continuously.
Dr Mony said that non-performing loans present a big challenge for microfinance institutions.
“This is because we cannot make a profit from people and companies facing bankruptcy.But a big thanks to the Cambodian people who have so far supported microfinance institutions without major hitches.”
He also said that Cambodia was very successful in managing its microfinancing and was highly rated by different agencies worldwide.
“These agencies found that we are successful because of efforts to reach out to some of the most remotest parts of the kingdom,” Dr Mony added.
“The repayment rate is between 98 or 99 per cent on time. There is only a one to two percent who default, compared with the world default rate of about 5 to 10 percent. In Cambodia, between 2012 and 2016, the non-performing loans remain below one percent, between 0.5 to 0.6 percent for all industries.
“I appreciate the government’s role in helping and supporting the fast economic growth. When economy grows people also earn money and can service the loans,” he said.
Dr Mony said that based on his experience, some people know how to manage their money well, but there others who fall prey to companies who are to cheat the public.