They want to sidestep outside lenders who charge exorbitant interest rates.
They want to put their savings somewhere safe, instead of hiding it in a suitcase or cupboard.
And they want to keep their money in the community so they can make loans to villagers, and pay for health care, education, farm tools, or extra help. For countless poor people around the world, having a safe place to save and access to that savings when a need arises means a way out of poverty.
"I want to use the money to buy a rice mill," says Ros Dy, a rice and vegetable farmer. "A rice mill is very good to keep in the group."
While an estimated 60 million of the world's self-employed have access to small loans from NGOs or private lenders, at least 200 million more are too poor or live in areas too remote for such services.
Oxfam America is working with local partners in Cambodia, Mali, and Senegal to develop a community finance approach that trains poor people to save what they can and distribute it within their villages—for an investment of about $20 per savings group member.
Oxfam and its partners use this methodology to combat poverty on a large scale with low costs, local control, and an easy-to-replicate format, said Jeffrey Ashe, the manager of the Community Finance program.
"What you want to do is drop that pebble in the water and see the ripples spread," he said.
How do you to teach the world's poorest people to save when many cannot read or write? Through active participation, Ashe said.
When Oxfam staff traveled to Mali in February to train Senegalese and Malian partners on how to form savings groups, they learned that some Western methods—like drawing on paper with markers—didn't really work too well.
"But if you drew in the dirt, people understood because they could do it themselves," Ashe said.
In May, that theme carried through to Cambodia, where Oxfam staff watched its local partner, the Centre d'Etude et de Développement Agricole Cambodgien (CEDAC), trade stories with villagers as a way to get them talking.
By asking questions and responding through stories, savings groups could decide who got a loan and at what interest rate. And they could establish rules for when money should be repaid.
"It's all very discussion-based," Ashe said. "You ask, ‘What would you like to do with your money? Well, how much would that cost?'"
By June, Oxfam staff and local partners were watching their simple, accessible approach take off.
In West Africa, partners Conseil et Appui pour l'Education a la Base (CAEB) and Le Tonus reported forming more than 200 village savings groups with an average of 24 members each in just six weeks. Some planned on divvying up the cash to individuals at the end of the saving cycle, while others focused on using the money to benefit the whole community—purchasing a grain mill or cultivating vegetables for sale at local markets.
In Cambodia, CEDAC reported plans to retrain its current base of 700 savings groups and add 300 new groups in just one year of using the new methodology. Ashe said CEDAC is in a position to actually accomplish it.
They have plenty of experience pulling communities together. Many of their savings groups are actually farmer associations that focused on specific high-yield agriculture techniques. Others had formed to work as self-help groups. Transitioning intosavings represents a natural progression.
But it can work in the other direction, too. Once a savings group is formed, it can take on other goals, like agriculture, health issues, or literacy. First though, the partners have to build up trust with villagers, said Vincent Wierda, the Community Finance Specialist in Oxfam's East Asia office.
"When it comes to saving together, it's a test of leadership to manage and protect the money jointly," Wierda said. Partners like "CEDAC allow a community to get used to the idea before pooling their money like this."
This is the first step in a long process of community finance, Wierda said. "Within four to six years, most of these villages should have the resources to effect change in their communities."
]]>Over a week in August, the river rose and this season's flood threat began. On Aug. 21, the swirling waters leapt over the banks at Thakhek, Mukdahahan, and Pakse in Lao PDR. The water continued to move closer to Cambodia, further downstream.
Last week, Oxfam America partner, Culture-Environment Preservation Association (CEPA), reported the water reaching emergency levels in Kratie province, Cambodia. Water levels were as high as 72 feet in some places. And, at one point, the Mekong was just three feet short of the flood warning level in Phnom Penh.
In Stung Treng province, officials issued flood warnings. About 250 acres of rice fields in Stung Treng were soaked in the flood water for more than a week. Farmers who depend on agriculture now fear losing their crops if the water takes much longer to recede.
Further along the river in Kompong Cham province, officials declared a state of emergency Aug. 20. Emergency workers set up sandbags along the river close to Kompong Cham town. Some families were evacuated to higher ground.
Though Oxfam cannot deter the water, we hope to reduce losses through the Community Based Flood Preparedness Project. Three years ago Oxfam Great Britain, supported with funding from other Oxfam affiliates including Oxfam America, started the Community-Based Flood Preparedness Project in Takéo province.
Villagers were taught how to raise their homesteads by building up the ground above flood level. This way their lives and belongings can be safe at the time of flood and storm.
They received training in first aid and public health education.
And safety was made a top priority. Life jackets, water containers and water filters for safe drinking, family boats, and a shared safe evacuation area for five or six villages are now available.
Since most Cambodians living in the flood-risk provinces are subsistence farmers and fishers who live below the poverty line, those who do not prepare have little capacity to recover. The preparation project helps people live as normal a life as possible during the floods, said Sau Si Samuth, Oxfam humanitarian program officer.
For example, women in Takéo can use the family boats to collect water plants. "At two in the morning they take what they have gathered to the market. They cannot afford to be without this lifeline for one day. Oxfam supports these women to maintain their family boats. Wood is taken to the community where the carpenters fix it. For each tree cut down, new trees are planted," Sau Si Samuth said.
A Village Disaster Management Committee encouraged the communities to be prepared for the coming flood. At the time of flood, the committee again helped their own people prevent any accidents that might occur. Because of the relative success in this province, Oxfam and its partners, Care Cambodia, World Vision and the National Committee for Disaster Management have visited other parts to increase the range of the flood preparedness project in the future.
Oxfam already has an assessment team in place for this approaching flood. They closely track the water level in all the provinces along the Mekong River, and in other flooded areas in Cambodia. A situation report will be drafted to inform the wider Oxfam humanitarian team based in Bangkok and Oxford, other Oxfam affiliates, and donors. The National Commission for Disaster Management and interested NGOs will be consulted on plans to assist the affected communities if the need arises.
Once the rain stops in early October, the people living along the Mekong might sleep easier, without the threat of floods at the back of their minds. But at least now they are better prepared.
]]>Five men from the Community Cooperative for Rural Development, or CCRD, an Oxfam partner organization, stood along the mill's perimeter, watching it work. Serious and proud, they admired their prize: the only certified organic rice mill in the country.
Cambodian rice farmers, long vulnerable to fluctuating prices and heavy regional competition, are looking to organic rice to help them carve out a niche in the market. As eating healthily has become more popular around the world, so has organic food. Organic products sell for a higher price than conventionally farmed food. In a country where more than a third of the population lives on less than $1 a day and more than half depends on agriculture, the organic advantage could translate into a reliable and steady income.
"The momentum is really growing," said Le Thi Nguyet Minh, an Oxfam America program officer in the East Asia office. "We need to maintain it."
Maintaining the organic momentum requires establishing farming cooperatives, which are equipped to work in the organic market. This transition represents a huge practical and emotional leap for many Khmer farmers.
The bloody civil war and subsequent genocide that ravaged Cambodia left many Khmer people distrustful of both their neighbors—and any sort of collective work, said Yann Omer-Kassin, an Oxfam Quebec field advisor supporting CCRD.
Even the words "farming cooperative" pose a problem. In Khmer, they translate into "work camp," a term that conjures up painful fears or memories of Khmer Rouge death camps. Many of the people Kassin talked to in Pursat said they were wary of joining a farming coop "because it's linked to a horrible past."
Because of these cultural sensitivities, CCRD staff work slowly and patiently to convert farmers to organic production. They spend much of their time simply building trust in the cooperative concept. They point to the tangible benefits of organic production.
Farmers are encouraged to use animal manure instead of chemical fertilizers—a requirement of organic certification. The resulting savings can be used—to grow other crops, or send children to school. If farmers use natural fertilizer, they can also prevent illness. Many farmers and farm workers get sick because they can't read the labels on the chemicals they use. Many of the chemicals are so dangerous they're prohibited in other countries.
Tang Eum, 47, a rice farmer in Pursat, said she began farming organic rice three years ago. She said natural fertilizer doesn't always produce as much rice as chemical fertilizer. But she's willing to accept that tradeoff if it means her family and friends won't get sick.
CCRD has converted at least 75 of the 1,500 farmers in its collective to farm organic. Their support is crucial. Many of the rice farmers face the same challenges organic and fair trade coffee farmers saw when they first learned about the new model. Many have farmed small plots with chemicals for generations. They need help learning new agriculture techniques so that they can someday grow as much rice as they had before.
Then they need help getting the experience, technical assistance, and market access to pull it all off.
It is a challenging task, CCRD workers said. But knowing what they do about the potential benefits keeps them motivated. Eventually they want to help local farmers not only farm organically, but take the next logical step, and sell to the fair trade market.
Fair Trade Certified™ products are high quality and grown through practices friendly to the environment. Farmers receive a minimum price even when the market price is low. According to a 2005 market study, if farmers made the transition from conventional growing to fair trade organic they could see their profits more than double.
Sitting at a wood table outside her house in Pursat, Tang Eum said she knows what she wants to do with that extra money. A mother and a businesswoman, she would use it to support her family and sell her rice.
"I want to use the money to send my children to school," she said. "And I want to buy a moto to go to the market in town."
]]>Some live along the lakeshore in small shacks built on stilts. Others live on the water in moored houseboats, rafts, and barges. From these simple homes, the fishers hurl out their lines and pull up their baskets, hoping to catch enough to feed their families and satisfy the middlemen in the fish trade.
According to the Fisheries Action Coalition Team (FACT), an Oxfam-funded partner organization in Cambodia, the fishers help support about 1.5 million people.
"The Tonle Sap is very, very important, not only for the people who live on and around the lake, but for all of Cambodia," said Pen Raingsey, project officer at FACT.
Each year, monsoon rains and melting snows from the Himalayas feed the Mekong River, swelling the Tonle Sap Lake. This yearly pattern nourishes a diverse underwater world of flooded forests and more than 100 species of fish.
But because the Tonle Sap is not only a source of food, but also a route for transportation and commerce, it faces increasing risks. Neighboring countries, corporations, and regional finance institutions want to blast rapids, develop hydropower dams, and build harbors on the Tonle Sap and its connecting waterways.
For fishers accustomed to picking up and moving with the changing tides, it's a difficult process to learn about these threats, let alone do anything about them. Water nomads as they are, fishers don't always meet up with their neighbors, or feel comfortable voicing their opposition to the government.
That's where the Fisheries Action Coalition Team comes in. The group navigates the Tonle Sap, networking with fishers and bringing them to shore to meet, exchange information, and tell decision-makers what effect their developments will have. Then FACT compiles the research into a database and uses it to refute claims that certain developments would have no negative impacts.
Because of this work, fishers on the Tonle Sap say they feel empowered to protect their way of life.
Sitting on a small motorboat in the middle of the muddy waters of the Tonle Sap, Ly Saloeun, 53, said FACT trained him to write reports, and work with his neighbors to advocate for change.
He is one of many key fishers, each learning how to protect their community.
"We want to encourage the local community to raise their concerns to the decision makers," Raingsey said. "Before, people had no time or rights. Now, when a problem occurs, they can find a way to resolve that problem."
]]>Amid cheers from a throng of enthusiastic supporters and international media, Make Trade Fair won the day.
Oxfam's trade campaign was launched.
Within hours of the Hong Kong debut, events were held in 25 cities including Brussels, Dublin, Geneva, Mexico City, San Salvador, and Washington, D.C. These events ranged from press conferences and symposiums to a rock concert in London’s Trafalgar Square.
Oxfam's trade campaign seeks to unite concerned citizens around the world in calling for fair trade policies that will help move millions of people out of poverty.
Nobel Prize Professor Amartya Sen, UN Secretary-General Kofi Annan, and musician and social activist Bono were among those who endorsed the campaign. "Oxfam has got it right," said Bono. "It wouldn't cost much to change the rules of trade so that poor countries can work their way out of poverty. But the world's leaders won't act unless they hear enough people telling them."
Also in this issue of EXCHANGE, writers Frances and Anna Lappé discuss their book Hope's Edge: The Next Diet for a Small Planet, and we bring you updates on Oxfam's work with water and sanitation, drought in Ethiopia, and indigenous women in the highlands of Peru who are speaking out after decades of violence.
]]>Oxfam's innovative approach to community finance breaks with that of traditional microfinance institutions. Saving for Change trains large numbers of savings and credit groups in the poorest regions of the world to save together and make loans to each other with their own resources instead of taking out a loan from a bank, credit union or microfinance institution.
"The first Saving for Change group was trained three years ago. Today, over 150,000 villagers in Mali and Cambodia have already joined savings and lending groups," said Raymond C. Offenheiser, president of Oxfam America. "With the support of the Bill & Melinda Gates Foundation, we will reach close to 550,000 villagers in the next three years."
With this growth, Saving for Change will become the largest microfinance program in these two countries and the only one reaching the rural poor at this scale. Village groups act as their own community banks, providing villagers with a place to save and easy access to loans. As a result, poor people living in remote areas with little or no financial institutions can access self-managed financial services to build assets, increase incomes, and improve the livelihoods of their families.
"Not only is Saving for Change different because it is based on saving instead of borrowing, it also relies on person-to-person training and relationships instead of technology. This helps build trust and ultimately makes the savings and lending groups more sustainable," said Offenheiser.
Oxfam will use this grant to replicate its community finance model in communities throughout Mali and Cambodia. In addition, it will allow the organization an opportunity to explore further program growth in Latin America.
Millions of people in Asia and Africa live on one dollar a day or less, and few have access to savings or other financial services that can help them increase their financial security and improve their lives. Without places to save, it is difficult for families to build savings to pay for educational fees, medical bills, or emergencies. Others have little or no access to micro loans that could improve their incomes through investments like setting up a small sales kiosk, buying crop fertilizer, or acquiring an animal for breeding.
Funding to expand Saving for Change comes from the Bill & Melinda Gates Foundation's Financial Services for the Poor initiative, which works with partners to make savings and other financial services available in developing countries so the poor can better manage life's risks and take advantage of life's opportunities.
"The innovative savings and lending approach has been successful at bringing affordable financial services to people with very low incomes living in remote communities," said Bob Christen, director of the Financial Services for the Poor initiative. "We believe that Saving for Change's groups will open the door to opportunity and increased household financial security for many poor people."
The grant also supports program evaluation and research that will help document and fully measure Oxfam's impact on communities. Researchers will be asking key questions on the affect participating in Saving for Change has including:
"The research component of this grant will help us fine tune our program so that it best meets the needs of the poor," concluded Offenheiser. "Documenting Saving for Change's success will also help build momentum for expanding savings-led community finance programs around the world."
Saving for Change is implemented by Oxfam America in collaboration with Freedom from Hunger and Norway-based Stromme Foundation. Freedom from Hunger's support includes developing training manuals, and contributing technical assistance for the planning, implementation and evaluation of the program. Stromme Foundation, along with The Bill and Melinda Gates Foundation, underwrites the costs for the teams training savings and lending groups in Mali.
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