Following are the issues and our activities that involve Development.

CUFA programs are established with specific goals, objectives and outputs that primarily seek to educate and build financial capacity in communities so that they can become financially independent - relieving or resolving poverty as a consequence.

Other agencies focus on aid, relief or welfare; our work is focused on development, to achieve financially sustainable, self determining communities. Our aim is to work with communities over a period of time. Programs are delivered, effects are evaluated: a successful program is achieved when our support is no longer required.

In broader terms, our programs also address other development issues beyond the stated program goals and objectives, in areas of:

Social, Human, Environmental, Financial, Physical, Rural development, Gender, Peace Building and Youth.

Following is a summary of our work in these areas, based on our Building Institutional Capacity Program in Cambodia.

Social

The benefits of cooperative community financial institutions is that these ‘emerging credit unions’ are owned and controlled by their members. Credit unions differ from other financial institutions in that the members who have accounts with the credit union are the credit union's owners. Members have the authority over the management of their credit union, and because of the participatory and empowering approach of mutuality, people are members, not just customers; however, in Cambodia a major problem is that members do not feel as though they have ownership over their CFI’s. As a result of years of donor dependence and credit-driven programs, members and management remain unaware of their rights and responsibilities (Matthews 2005).

Investing in institutional capacity in rural Cambodian will help pave the way for CFI’s to provide their members with access to safe and affordable financial services. Rural people have the capability to save; however, they will only make the choice to save in financial institutions if they are safe and convenient and management is skilled and shows respect for the rules. This project addresses these core issues because it provides key management and staff with the skills they (and their members) have identified as lacking. The overall purpose of this project is to build institutional capacity in CFI’s so that members can have a safe and reliable place to keep their money, and where members trust their management committees and know their rights. It has been argued that the success of CFI’s will rely upon “people, institutions and trust” . For too long, MFI’s and NGO’s have focused solely on the distribution of credit, while their resources should have been invested in training, technical assistance and overall institutional building.

Human

Human resource capital will be strengthened through the provision of skills training and technical assistance by CUFA to staff of cooperatives. This training will also improve member and community participation through research, training, workshops and forums. This will result in increased member skill levels, allowing more informed decision-making in credit union procedures.

Environmental

There are no foreseen environmental impacts as a result of the project, although access to savings and credit has the potential to decrease the rural population’s dependence on agriculture as a subsistence income. Problems of low agricultural yields put additional stress on the environment and access to loans will improve diversification of production. The loans can be used for micro enterprise and the community can engage in diversified income generating projects that do not rely on using environmental resources to survive.

Financial

Credit unions are built on mutuality and transparency of accounts and the technical assistance provided by CUFA will help strengthen governance and regulatory procedures. This will improve the economic viability of credit unions as the staff and communities will become equipped with skills that allow them to implement effective savings mobilisation strategies, attract new membership and provide more loans. By making money productive instead of it being stockpiled in the home, a clay pig, or livestock, the members can earn interest on their savings and accumulate capital for their community to invest in new enterprise.

Physical

As membership and savings mobilisation grows, the communities will be able to invest money in tangible assets including machinery to increase production, transport to take their produce to the marketplace, and providing education opportunities for their children or expanding their small business. Parallel to the credit unions success is an increase in purchasing power enabling the rise of community infrastructure development.

Rural development

The communal bond of ownership of their credit union helps to bring communities together to build a common goal. It has been identified that rural populations are engaged in subsistence agriculture, have low levels of literacy and little or no access to financial institutions. Through provision of training, support and governance mechanisms, existing credit unions will be strengthened and a conducive environment for the establishment of emerging credit unions will be created. Current credit union members have stated that they lack the necessary capacity to improve their services and expand their membership resulting in them refusing to accept new members due to lack of confidence about handling more money. As a result of our training, the organisations will have the increased confidence to accept more members and develop their products as the need arises, adding to the sustainability of their credit union. Through working with local NGO’s CUFA will assess initiatives to include people who have no access to rural financial services.

Participation in credit unions will allow the rural population to mobilise their savings in a productive way to benefit the wider community. This will create opportunities to move away from subsistence and engage in the establishment of micro enterprise that will be more productive to help increase their living standards.

During program evaluations CUFA will monitor progress through increased membership levels, greater savings, the amount of loans granted and the emergence of new enterprise.

Gender

The international credit union system has a set of Operating Principles, one of which is non-discrimination on the grounds of gender. CUFA and its partners follow this operating principle in all program and project activities, and design is invariably based on equal opportunity and access for men and women to participate in training and exposure.

During various visits to CBMIFO’s and CFI’s in rural Cambodia, CUFA staff observed that while women membership was high, the number of women serving in leadership positions (management and key staff) was often very low. At the present, CBMIFO’s have 16,243 women out of a total of 25,220 members. CFI’s report 25,246 women out of 57,883 members. Women are a vital part of credit union development in Cambodia (and make up the majority of CBMIFO/CCFiN members), yet their admittance to leadership positions is currently limited due to poor literacy skills and access to training. CUFA has designed this project with the condition that 50% of all training participants are women. In addition, a component of the training curriculum will be gender equality in management/leadership. CFI’s have indicated to CCFiN that this component is of great demand and importance among CFI members.

Peace Building

Credit union members usually have a common bond that can be based on a community, organisational, employee or religious affiliation. This common bond is open to all as there is non-discrimination within membership. The common bond establishes a degree of mutual accountability amongst the members that minimises the risk of default on loans, which in turn encourages active support and a responsible attitude from the members towards their credit union. Through the shared experience of watching their savings grow and being able to lend money for micro enterprise and development, credit union members are able to see the beneficial capacity of their organisation within their communities. As savings mobilisation and member numbers increase the credit unions provide a sense of empowerment and community ownership of the development process. This contributes to trust levels and community cohesion as people are coming together to create a joint solution to help improve their living standards.

CUFA will monitor the progress of trust building in their credit unions through speaking with the communities and assessing the numbers of new credit unions formed, increases in savings and greater membership levels.

Youth

In 2005 the percentage of the population 15 years and under was calculated to be 37.6% and by 2015 this percentage is predicted to drop only marginally to 32.1%, representing almost a third of the total population (http://hdrstats.undp.org/).

It is imperative that Youth continue to be targeted in CUFA’s program reach. The Building Institutional Capacity program includes training focused on children’s literacy and the importance of teaching good savings habits from a young age. Encouraging the participation of this sector of the population in the financial sector, in particular in credit unions, will assist to build the ongoing financial sustainability of communities across Cambodia.