The World Bank, on Friday, approved funding of $20.17 million for the Livelihood Enhancement and Association of the Poor Project (LEAP) in Cambodia. The Project aims to increase income, build skill, and construct small-scale community of poor and vulnerable families living in Siem Reap Province and Phnom Penh Capital.
According to the Bank, in Siem Reap, the Project will help poor and vulnerable families living in 47 communes to build their financial capacity by creating "self-help groups" and "producer groups". The Bank will provide them basic training on financial literacy, business planning, accounting and record keeping.
The Project will also provide vocational training to unemployed young people and women for them to be able to find job in Cambodian labor market.
For poor families, the Bank will provide seed grants in order to help them to create and/or run their own business.
As for the Bank, to generate income for poor families, the Project will also provide funding to create or improve "small-scale community infrastructure" such as water supply and sanitation, small irrigation systems, small warehouses, community access roads, and on-farm water management.
On the other hand, in Phnom Penh, the Project will do the same way by providing funds for "small-scale community infrastructure" and vocational training in 13 communes.
"Cambodia has been a leader in Southeast Asia in reducing poverty," said Ulrich Zachau, World Bank’s Country Director for Southeast Asia. "This Project will help reduce poverty in Cambodia further, directly improving the lives of the poor and vulnerable in Siem Reap and Phnom Penh. The World Bank is honored to support the people of Cambodia through this Project."
Financial experts said that giving the poor access to financial services can reduce poverty and inequality, and speed up the development of financial markets in Asia that represents 60 percent of global growth.
However, experts added that not all poor family understand properly banking mechanism, as a result, financial literacy is needed for them to be able to use the money they loan from the bank in the right way.
"Expanding financial literacy should be the priority for developing Asia, where apart from the unbanked population there are many poor people who do have access to financial services but don’t utilize them because they don’t understand them properly," wrote experts at the Asian Development Bank (ADB).
The ADB pointed out that many poor people living in Asia still believe loans are for businessmen and big farmers. As a result, they prefer using informal costly credit sources. In consequence, high interest rates charged by informal moneylenders could cause mounting debt to them.
In Cambodia, to promote financial literacy, the Ministry of Education, Youth and Sport (MoEYS), and the National Bank of Cambodia (NBC), were working together to establish a general education curriculum in order to teach students about financial system as well as banking system in the kingdom.
Moreover, to speed up financial inclusion, the ADB said that digital financial service can help a lot - debit cards and mobile phones can enhance coverage by allowing people to do many payments in their hands. However to make digital financial service possible, the government needs to help private sector to expand internet coverage nationwide.
"New technology like biometric information and digital IDs has opened up exciting new channels for financial inclusion. But governments need to work closer with the private sector to improve internet connectivity for banking, as the People's Republic of China (PRC) has done through a massive programme to boost rural broadband internet infrastructure," wrote the ADB.
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