ILO-WEDGE
Best Practice
Group Saving Training: building economic security in the Mekong region of Cambodia
Models from the Mekong subregion of Cambodia on gender equality and entrepreneurial development
THE GOOD PRACTICE:
Priming women to change their economic condition one weekly savings at a time and preparing them to become clients of microfinance institutions when they are ready to spread their entrepreneurial wings.
THE INITIAL CHALLENGE:
Economic insecurity and indebtedness are two of the major poverty traps leading to child labour in Cambodia. Families that struggle to provide the basic needs are likely to take their children out of school to work to supplement the household income. Microfinance opportunities could allow them breathing space to improve their economic liability and keep their children in school. At the least, it would enable them to better protect their assets by offering manageable loans to deal with a financial emergency, such as an illness, accident, death or something that other fiscal shocks can trigger. Or it could allow them to pursue micro or small enterprise options. But because of their financial fragility, these people are excluded from microfinance services: They don’t meet requirements, they don’t have collateral, they are already indebted or they have no permanent residence. In Cambodia, a majority of rural residents have no access to a savings service. Microfinance institutions don’t offer any savings facility and banks cater to major urban areas.
THE RESPONSE:
The International Labour Organization’s Women’s Entrepreneurship Development and Gender Equality project (ILO–WEDGE) took the idea of self-help savings groups (and loan fund) popular in the region to use as a stepping stone towards helping women gain financial literacy, at the least, or eventually pursue life-changing entrepreneurial ventures. The ILO–WEDGE project worked with another ILO project aiming to reduce the incidence of child labour, and together they initiated the self-help group trainings in villages.
THE PROCESS:
To be effective as a tool against indebtedness and to properly prepare women to become clients of microfinance institutions one day, self-help groups need to be well managed. The ILO thus developed detailed guidelines for use in both its WEDGE project and the complementing project targeting families of children in the worst forms of labour (in brick making, rubber plantations, fishing, salt making and child porters at the border with Thailand).
The guidelines explain the purpose of a self-help group and how to set one up from scratch. They guide women on how to organize themselves into groups of up to 20 members, how to set up the administrative procedures and how to decide on the internal regulations.
The fund is owned by the group and consists of the savings the members contribute weekly, which become the resource for making short-term, low-interest loans to members. The interest payments are divided among members at the end of each year.
The first step in organizing a fund involves a properly prepared trainer meeting with village authorities to explain the concept. The trainer typically recommends that the group be composed of women. This is because women manage the household finances in Cambodia and are thus more experienced in managing money. The next step has the trainer meeting with the men in a village to again explain the concept and the recommendation for membership; the purpose is to encourage men to offer women their support. The third step involves explaining the objectives, principles, structure, regulations and process of the self-help group to women. They then can organize themselves into groups of 10–20 members.
In some areas, villagers took part in other ILO trainings, such as GET Ahead for Women in Enterprise or Financial Education, and through that experience were interested to create a self-help group.
Villagers wanting to join the self-help group training are asked to first discuss the activity with their spouses to ensure support and avoid familial tension later on. In this way, the people who join are already primed for the ideas the training presents, particularly the emphasis on gender equality and social empowerment.
The trainer returns a week later to review the previous information and to help each group elect its management committee and decide on their internal regulations. The management committee entails five members: president, someone responsible for the savings administration, someone responsible for the loan administration, someone in charge of the cash book and a controller.
In the third week, the trainer explains bookkeeping to the management committee and helps the president conduct the first group meeting. This is the week to collect the first savings contribution. The trainer lets the president handle the fourth week’s meeting alone and returns in the fifth week to review the bookkeeping. Loans are distributed during the third group meeting.
Then the group is largely on its own. The trainer returns periodically to check on the bookkeeping and contend with any problems. At the end of the year, the trainer oversees the distribution of the group’s profit.
Building successful groups
A large part of a group’s success is dependent upon the trust among members. Because there are four record books in operation (one for savings, one for loans, one for a cash book and one held by each member), there is clear transparency and trust can begin to bloom. As the savings grow, particularly the interest earnings, the trust among the members also grows.
Another key to making a group successful is to keep meetings short. Women in particular don’t often have much free time. So meetings largely serve to receive members’ weekly savings contribution; if necessary, members can send the money with someone else. A longer meeting takes place at the end of the year to distribute the interest earnings and to talk about the year’s progress. If an issue arises that requires a group discussion, arrangements are made or the managing committee consults directly with members individually.
In 2008 and as part of the strategy to enable the concept to endure beyond ILO support, the ILO–WEDGE project organized three workshops for the management committee members from 138 self-help groups. The workshops brought people together from seven provinces to strengthen their management skills by providing them with a forum in which they could talk about their experiences and challenges. Such an opportunity was the first time for the members to learn from each other.
The reality of belonging to a group helps generate a deeper community spirit among the members and a sense of wanting to help fellow members. “Some middle-income people who are not part of the targeted group have joined with us because they want to help support their neighbours,” says Dorn Sina, a self-help group member in Kampong Cham province.
Complementing training
Members of self-help groups can take advantage of financial education training or learn about starting a business through business skills training from the GET Ahead for Women in Enterprise programme, also offered through the ILO–WEDGE project. Trainers from many organizations have been coached in all areas of entrepreneurial training because exposing villagers to one set of skills typically remains unfertilized without better knowledge in the other areas.
Developing effective trainers
The ILO–WEDGE and child labour projects sought out trainers among local non-government organizations operating in areas with a high incidence of child labour. A group of trainers from seven NGOs were intensively tutored over nine days (five for GET Ahead training, two for financial education and two for self-help group formation) to deliver training and guidance on several of the ILO–WEDGE’s strategies for empowering women to develop their economic viability. For each type of training, the ILO–WEDGE project developed or adapted detailed manuals that reflect both the Cambodian context and gender-relevant issues.
Phon Samnang, a project officer with Kaseko Thmey Organization in Kampong Cham province says the training has made a difference in his NGO’s work: "In the past I tried to set up self-help groups but without clear guidelines. That was why they were not that successful. However, my knowledge and skills that I have gained through the WEDGE training are very useful not only for our programmes but also relevant and useful for other organizations working in the same areas. I am proud to share my knowledge and skills with them.”
Gender perspective
The methodology in the GET Ahead for Women in Enterprise training provides practical business skills, knowledge or advice for cultivating a business mind – especially for women. It is a departure from the welfare perspective commonly used in development programmes for small-scale business building. The GET Ahead training helps women understand how to juggle running a business, a home and a family.
The manual on financial education helps Cambodians learn manage their finances. The purpose of the training is to make women and men more informed and empowered decision-makers, able to set financial targets and reach them, whether in the household or in a small-scale business. The emphasis is on discussing the family finances as a couple or even as a family and making decisions together that serve to benefit and strengthen the family. This includes identifying expenses that could be reduced to help the family, such as smoking and drinking alcohol.
These methodologies are also woven into the self-help training as well, along with discussion on the typical barriers or challenges women might encounter when starting or growing a business and how to handle them. The gender perspective applied through practical applications, such as forming a self-help group or learning to better manage family finances, helps empower women to have an equal say in their household and helps cultivate increased respect from their husbands for their ideas and their work.
Med Mony works with the Natural Resources Management and Livelihood government project and has been trained in forming self-help groups as well as financial education and GET Ahead training. He says he is seeing amazing changes among men who have participated in a training or whose wife has. They are helping out more at home, he says, and encouraging their wives to get more involved in their groups. The women, he adds, “are very happy. Something they thought could never happen has happened.”
Ongoing supprt for NGOs and trainers
To ensure the continuation of the groups, the ILO–WEDGE and child labour projects organized in early 2008 a national workshop with the partner NGOs and microfinance institutions to discuss problems and solutions. The main purpose of the workshop was three-fold: i) analyse the situation of 138 self-help groups and the current and potential challenges encountered and discuss solutions to overcome them; ii) establish an exit strategy for ILO–WEDGE project to ensure the sustaining link between other organizations and the microfinance services; and iii) nurture the relations between group leaders and local NGOs and thus better cooperation.
OUTCOMES (as of April 2009)
¨A total of 28 trainers from seven local organizations in seven provinces with a high incidence of child labour have received training in creating self-help groups.
¨The seven NGOs have helped create a total of 150 self-help groups (2007–2008), composed of some 6,206 people (5,368 of them women), most of them from families of working children. The ILO–WEDGE project coordinator trained 119 people in early 2009 (105 of them women).
¨In 2008, ILO–WEDGE formed five self-help groups with a total of 120 members (all women) for Prachak Oil Producers Association in Svay Rieng province.
¨In February 2009, the ILO–WEDGE project helped train 23 projects officers from partner organizations of Paz y Desarrollo (a Spanish NGO) in a total of four provinces, with the intent to establish many self-help groups in those provinces.
¨In March 2009, two self-help groups were established among 60 pig-raising groups in Kratie and Kampong Cham provinces, with technical support from ILO–WEDGE project.
Impact analysis has shown that savings increased significantly – up from $.50 to $5 a week per member in some groups. After a year of belonging to a self-help group, self-confidence among members tends to become quite visible; there are strong bonds among members, at least where there is a strong management committee committed to supporting the group.
Self-help groups have become quite popular; in every village that trainers (trained through the ILO–WEDGE project) approach, there is interest in establishing a self-help group. Of course, some become much more successful than others.
“I am very proud that my self-help group is very successful. In the first year, the amount of our savings was quite small but it increased significantly this year, to 21 million riels (US$5,250), says Sao Sarin, a self-help group leader in Kep province. “All members trust each other. More and more people would like to join our group.”
ONGOING CHALLENGES:
When Cambodia was hit by rising food and fuel prices, the self-help groups provided the poorest households with a financial buffer. However, it meant that in some areas savings were drawn completely down for consumption rather than business purposes; some groups folded and are only likely to re-establish once prices settle back to previous levels.
¨The self-help group model is limited; during peak spending times, such as planting time and the start of the new school year, it is difficult for some groups to maintain its savings deposits.
¨Although most of the savings deposits are turned around as loans and thus little actual cash is on hand, there is no completely safe “storage” of the savings. The person in charge of the savings administration keeps the money in her home.
Villagers move easily to other areas, especially when there are offers available to buy their house or land. It’s hard for a group of five or six members to carry on when more than one member leaves.
LESSONS LEARNED:
Trust among members is an essential factor to keep a self-help group strong and successful.
A strong management committee makes all the difference in the success of a self-help group. A few groups have withered without that strong support.
Follow-up support from trainers is very important. "If we try to grow them we need to water or fertilize them," explains the ILO-WEDGE project coordinator. "If we are tehre they feel we supoprt them. When partners don't go back and the trainees don't see a face for six or seven months, they think there is no support and they lose interest. Without that support they lose confidence in themselves."
Having trainers who maintain a strong commitment to helping the poor is a key for success.
"I used to laugh at my neighbours that they did not know how to keep their own savings. But after the first year, I decided to join them because the rules are fair and money doesn’t get lost,” says Tom Kheoun. “In the past, people looked down on me when I needed to borrow from the money lender. Now I borrow from the group and at the end of the year we all get to share the profit.”
For more information about this group savings model, contact:
Seltik Heng, National Project Coordinator
ILO Joint Projects Office, Building F, 2nd Floor,
Corner Sihanouk & Sothearos Blvd, Sangkat Tonle Bassac, Khan Chamcamorn,
Phnom Penh, Cambodia
Tel: 855-23-220-817
[email protected]
THE GOOD PRACTICE:
Priming women to change their economic condition one weekly savings at a time and preparing them to become clients of microfinance institutions when they are ready to spread their entrepreneurial wings.
THE INITIAL CHALLENGE:
Economic insecurity and indebtedness are two of the major poverty traps leading to child labour in Cambodia. Families that struggle to provide the basic needs are likely to take their children out of school to work to supplement the household income. Microfinance opportunities could allow them breathing space to improve their economic liability and keep their children in school. At the least, it would enable them to better protect their assets by offering manageable loans to deal with a financial emergency, such as an illness, accident, death or something that other fiscal shocks can trigger. Or it could allow them to pursue micro or small enterprise options. But because of their financial fragility, these people are excluded from microfinance services: They don’t meet requirements, they don’t have collateral, they are already indebted or they have no permanent residence. In Cambodia, a majority of rural residents have no access to a savings service. Microfinance institutions don’t offer any savings facility and banks cater to major urban areas.
THE RESPONSE:
The International Labour Organization’s Women’s Entrepreneurship Development and Gender Equality project (ILO–WEDGE) took the idea of self-help savings groups (and loan fund) popular in the region to use as a stepping stone towards helping women gain financial literacy, at the least, or eventually pursue life-changing entrepreneurial ventures. The ILO–WEDGE project worked with another ILO project aiming to reduce the incidence of child labour, and together they initiated the self-help group trainings in villages.
THE PROCESS:
To be effective as a tool against indebtedness and to properly prepare women to become clients of microfinance institutions one day, self-help groups need to be well managed. The ILO thus developed detailed guidelines for use in both its WEDGE project and the complementing project targeting families of children in the worst forms of labour (in brick making, rubber plantations, fishing, salt making and child porters at the border with Thailand).
The guidelines explain the purpose of a self-help group and how to set one up from scratch. They guide women on how to organize themselves into groups of up to 20 members, how to set up the administrative procedures and how to decide on the internal regulations.
The fund is owned by the group and consists of the savings the members contribute weekly, which become the resource for making short-term, low-interest loans to members. The interest payments are divided among members at the end of each year.
The first step in organizing a fund involves a properly prepared trainer meeting with village authorities to explain the concept. The trainer typically recommends that the group be composed of women. This is because women manage the household finances in Cambodia and are thus more experienced in managing money. The next step has the trainer meeting with the men in a village to again explain the concept and the recommendation for membership; the purpose is to encourage men to offer women their support. The third step involves explaining the objectives, principles, structure, regulations and process of the self-help group to women. They then can organize themselves into groups of 10–20 members.
In some areas, villagers took part in other ILO trainings, such as GET Ahead for Women in Enterprise or Financial Education, and through that experience were interested to create a self-help group.
Villagers wanting to join the self-help group training are asked to first discuss the activity with their spouses to ensure support and avoid familial tension later on. In this way, the people who join are already primed for the ideas the training presents, particularly the emphasis on gender equality and social empowerment.
The trainer returns a week later to review the previous information and to help each group elect its management committee and decide on their internal regulations. The management committee entails five members: president, someone responsible for the savings administration, someone responsible for the loan administration, someone in charge of the cash book and a controller.
In the third week, the trainer explains bookkeeping to the management committee and helps the president conduct the first group meeting. This is the week to collect the first savings contribution. The trainer lets the president handle the fourth week’s meeting alone and returns in the fifth week to review the bookkeeping. Loans are distributed during the third group meeting.
Then the group is largely on its own. The trainer returns periodically to check on the bookkeeping and contend with any problems. At the end of the year, the trainer oversees the distribution of the group’s profit.
Building successful groups
A large part of a group’s success is dependent upon the trust among members. Because there are four record books in operation (one for savings, one for loans, one for a cash book and one held by each member), there is clear transparency and trust can begin to bloom. As the savings grow, particularly the interest earnings, the trust among the members also grows.
Another key to making a group successful is to keep meetings short. Women in particular don’t often have much free time. So meetings largely serve to receive members’ weekly savings contribution; if necessary, members can send the money with someone else. A longer meeting takes place at the end of the year to distribute the interest earnings and to talk about the year’s progress. If an issue arises that requires a group discussion, arrangements are made or the managing committee consults directly with members individually.
In 2008 and as part of the strategy to enable the concept to endure beyond ILO support, the ILO–WEDGE project organized three workshops for the management committee members from 138 self-help groups. The workshops brought people together from seven provinces to strengthen their management skills by providing them with a forum in which they could talk about their experiences and challenges. Such an opportunity was the first time for the members to learn from each other.
The reality of belonging to a group helps generate a deeper community spirit among the members and a sense of wanting to help fellow members. “Some middle-income people who are not part of the targeted group have joined with us because they want to help support their neighbours,” says Dorn Sina, a self-help group member in Kampong Cham province.
Complementing training
Members of self-help groups can take advantage of financial education training or learn about starting a business through business skills training from the GET Ahead for Women in Enterprise programme, also offered through the ILO–WEDGE project. Trainers from many organizations have been coached in all areas of entrepreneurial training because exposing villagers to one set of skills typically remains unfertilized without better knowledge in the other areas.
Developing effective trainers
The ILO–WEDGE and child labour projects sought out trainers among local non-government organizations operating in areas with a high incidence of child labour. A group of trainers from seven NGOs were intensively tutored over nine days (five for GET Ahead training, two for financial education and two for self-help group formation) to deliver training and guidance on several of the ILO–WEDGE’s strategies for empowering women to develop their economic viability. For each type of training, the ILO–WEDGE project developed or adapted detailed manuals that reflect both the Cambodian context and gender-relevant issues.
Phon Samnang, a project officer with Kaseko Thmey Organization in Kampong Cham province says the training has made a difference in his NGO’s work: "In the past I tried to set up self-help groups but without clear guidelines. That was why they were not that successful. However, my knowledge and skills that I have gained through the WEDGE training are very useful not only for our programmes but also relevant and useful for other organizations working in the same areas. I am proud to share my knowledge and skills with them.”
Gender perspective
The methodology in the GET Ahead for Women in Enterprise training provides practical business skills, knowledge or advice for cultivating a business mind – especially for women. It is a departure from the welfare perspective commonly used in development programmes for small-scale business building. The GET Ahead training helps women understand how to juggle running a business, a home and a family.
The manual on financial education helps Cambodians learn manage their finances. The purpose of the training is to make women and men more informed and empowered decision-makers, able to set financial targets and reach them, whether in the household or in a small-scale business. The emphasis is on discussing the family finances as a couple or even as a family and making decisions together that serve to benefit and strengthen the family. This includes identifying expenses that could be reduced to help the family, such as smoking and drinking alcohol.
These methodologies are also woven into the self-help training as well, along with discussion on the typical barriers or challenges women might encounter when starting or growing a business and how to handle them. The gender perspective applied through practical applications, such as forming a self-help group or learning to better manage family finances, helps empower women to have an equal say in their household and helps cultivate increased respect from their husbands for their ideas and their work.
Med Mony works with the Natural Resources Management and Livelihood government project and has been trained in forming self-help groups as well as financial education and GET Ahead training. He says he is seeing amazing changes among men who have participated in a training or whose wife has. They are helping out more at home, he says, and encouraging their wives to get more involved in their groups. The women, he adds, “are very happy. Something they thought could never happen has happened.”
Ongoing supprt for NGOs and trainers
To ensure the continuation of the groups, the ILO–WEDGE and child labour projects organized in early 2008 a national workshop with the partner NGOs and microfinance institutions to discuss problems and solutions. The main purpose of the workshop was three-fold: i) analyse the situation of 138 self-help groups and the current and potential challenges encountered and discuss solutions to overcome them; ii) establish an exit strategy for ILO–WEDGE project to ensure the sustaining link between other organizations and the microfinance services; and iii) nurture the relations between group leaders and local NGOs and thus better cooperation.
OUTCOMES (as of April 2009)
¨A total of 28 trainers from seven local organizations in seven provinces with a high incidence of child labour have received training in creating self-help groups.
¨The seven NGOs have helped create a total of 150 self-help groups (2007–2008), composed of some 6,206 people (5,368 of them women), most of them from families of working children. The ILO–WEDGE project coordinator trained 119 people in early 2009 (105 of them women).
¨In 2008, ILO–WEDGE formed five self-help groups with a total of 120 members (all women) for Prachak Oil Producers Association in Svay Rieng province.
¨In February 2009, the ILO–WEDGE project helped train 23 projects officers from partner organizations of Paz y Desarrollo (a Spanish NGO) in a total of four provinces, with the intent to establish many self-help groups in those provinces.
¨In March 2009, two self-help groups were established among 60 pig-raising groups in Kratie and Kampong Cham provinces, with technical support from ILO–WEDGE project.
Impact analysis has shown that savings increased significantly – up from $.50 to $5 a week per member in some groups. After a year of belonging to a self-help group, self-confidence among members tends to become quite visible; there are strong bonds among members, at least where there is a strong management committee committed to supporting the group.
Self-help groups have become quite popular; in every village that trainers (trained through the ILO–WEDGE project) approach, there is interest in establishing a self-help group. Of course, some become much more successful than others.
“I am very proud that my self-help group is very successful. In the first year, the amount of our savings was quite small but it increased significantly this year, to 21 million riels (US$5,250), says Sao Sarin, a self-help group leader in Kep province. “All members trust each other. More and more people would like to join our group.”
ONGOING CHALLENGES:
When Cambodia was hit by rising food and fuel prices, the self-help groups provided the poorest households with a financial buffer. However, it meant that in some areas savings were drawn completely down for consumption rather than business purposes; some groups folded and are only likely to re-establish once prices settle back to previous levels.
¨The self-help group model is limited; during peak spending times, such as planting time and the start of the new school year, it is difficult for some groups to maintain its savings deposits.
¨Although most of the savings deposits are turned around as loans and thus little actual cash is on hand, there is no completely safe “storage” of the savings. The person in charge of the savings administration keeps the money in her home.
Villagers move easily to other areas, especially when there are offers available to buy their house or land. It’s hard for a group of five or six members to carry on when more than one member leaves.
LESSONS LEARNED:
Trust among members is an essential factor to keep a self-help group strong and successful.
A strong management committee makes all the difference in the success of a self-help group. A few groups have withered without that strong support.
Follow-up support from trainers is very important. "If we try to grow them we need to water or fertilize them," explains the ILO-WEDGE project coordinator. "If we are tehre they feel we supoprt them. When partners don't go back and the trainees don't see a face for six or seven months, they think there is no support and they lose interest. Without that support they lose confidence in themselves."
Having trainers who maintain a strong commitment to helping the poor is a key for success.
"I used to laugh at my neighbours that they did not know how to keep their own savings. But after the first year, I decided to join them because the rules are fair and money doesn’t get lost,” says Tom Kheoun. “In the past, people looked down on me when I needed to borrow from the money lender. Now I borrow from the group and at the end of the year we all get to share the profit.”
For more information about this group savings model, contact:
Seltik Heng, National Project Coordinator
ILO Joint Projects Office, Building F, 2nd Floor,
Corner Sihanouk & Sothearos Blvd, Sangkat Tonle Bassac, Khan Chamcamorn,
Phnom Penh, Cambodia
Tel: 855-23-220-817
[email protected]
