In the very remote districts of Ratanakiri, most residents are indigenous people who live their lives growing cash crops such as cashew, soybean, mung beans, upland rice, and cassava. This crop growing is an additional source of income to their traditional practice of accessing forest resources, swidden cultivation, and animal husbandry.
These sources of income were enough for the daily expenses of those families until recently. Things changed when many families aspired to urban people’s materialistic way of life.
They began spending their income on modern possessions such as the latest model motorbikes, cars, clothes, and frequent parties.
When they were short of money to support this lifestyle, they began borrowing from private money lenders and financial institutions in their area. While the people get access to capital, the issues associated with it were high-interest rates and high financial leverage.
These remote people’s economy was subsistence, with very little need for money, so they have minimal experience and understanding of financial management.
As a result, they were in a significant level of debt where they could not manage their monthly interest payments. For some, a lack of financial literacy, long-term planning skills, and household budgeting skills led to over-indebtedness. Those over-indebted had to sell land and other collateral to keep up with their payments.
To address this critical issue, ABA Bank and the Canadian company Angkor Resources Corp., the partner of ABA Bank in corporate social responsibility (CSR), designed and conducted the Empowering Remote Communities through Financial Literacy Program to develop the knowledge and skills of those remote communities to grow their economies and finances in a wise and healthy manner.
Through this Program, ABA demonstrates its business mission and commitment to caring for the future of Cambodians and the country.
The bank historically undertakes the approach of providing only productive loans, supporting real sectors of the economy while caring about the financial health of its borrowers. The over-indebtedness issue, among others, resonated with ABA’s values and triggered the bank to participate in the Program.
The Financial Literacy Program was kicked off with Training of Trainers (ToT) for 14 community teachers under the support of the ABA’s Credit Training team. The first training phase was conducted in September 2022, with nine classes covering four indigenous language groups (Kreung, Brao, Tampuen, and Jarai). It ensured maximum participation and understanding, especially from women and less-literate community members. There were 204 participants, of which 50 per cent were female.
The training has had a positive impact on the people. Rather than relying solely on loans for fast cash, they find alternative ways to earn income and manage daily expenses.
Villagers are now looking for ways to increase their income instead of just waiting for the seasonal cassava or cashew harvest. Some families have temporarily moved locations to do shared farming and access extra employment opportunities. Some are looking at alternative crops such as cacao and durian.
The enthusiasm is high, and to keep the momentum going, ABA Bank and Angkor Resources are preparing for the next phase of financial literacy classes after the busy harvest season.
“Many people did not realize the importance of the course in the beginning. Later they told the trainer that the content was filtering through the village, and everyone was excited,” commented Gordon Paterson, an independent project development manager in Ratanakiri that helps run the Program.
“They now recognize the future of their community and encouraged the trainers to continue the course to its completion and spread the message to other communities so that they can hold their heads high,” he added.
Thaeh Bo, a 43-year-old man, said after the training, “I would like to thank ABA Bank trainers for [training us on this important financial literacy and] providing us these materials.
Before the training, other villagers and I didn’t know much about managing our income and daily expenditure. Now, we know about them and are willing to look for ways of increasing income to plan our families’ future. Once again, I deeply thank ABA for coming here for us.”
Building on the positive result of the initial phase, both ABA Bank and Angkor Resources Company will expand the Program to more villages and districts and conduct further training of trainers for remote villagers. One indicator that the Program can spontaneously spread is that after completing the first round of classes, the trainee teachers are now promoting the Program with local authorities and have started new classes in the neighboring villages of their own volition.
Alongside the implementation of this Program, ABA has been continuously supporting different initiatives on financial literacy and inclusion. In 2022, the Bank partnered with the National Bank of Cambodia to implement the Financial Literacy for Kids Project by printing 5,000 financial comic books for primary school students. ABA financed the Khmer Enterprise Investment Readiness Program and the Women Entrepreneurship Challenge to support start-ups and women entrepreneurs in developing their business ideas. The Bank also sponsored regional finance-related events such as the ASEAN Savings Day 2022 and the FinTech Stage of the 40th and 41st ASEAN Summits.
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