When the elder Koreans see the current situation of Cambodia, they usually say it reminds them of the previous look of Korea’s society. Korea was considered as a typical farming country but it met the “Barley hump” between 1950s and early 1960s after the country gained its independence from Japan. The Barley hump was the hard farming period between May and June and when there was no food to eat because the grain was exhausted and the new crops had not ripened. In order to resolve the food shortages, the farmers autonomously created a cooperative called “NongHyup” with support from the Korean government. NongHyup is the short form of National Agricultural Cooperative Federation. NongHyup initiated the promotion of rice saving movement called Jomdori Movement. It means keeping the handful of rice apart whenever it was cooked, and providing funds to the poor farmers to do farming through credit business. Furthermore, the mutual financing of association members contributed greatly to lowering of high interest rates of private loans and then influentially to the reduction of the private loans in rural areas, and it was a crucial factor in establishing financial institutions in rural areas.
Cambodia has a large cultivable area, abundant water resources and great potential agricultural production. About 80% of Cambodia’s population lives in rural areas and about 45% of the total workforce is engaged in agriculture. However, 73% of all agriculture-related households operate only to serve home consumption, leaving 27% who are reportedly selling their crops to earn profits. These statistics show that rural areas are dependent on agriculture by using traditional farming techniques and have less opportunity to raise high income. That is why there is a continuing vicious cycle of illegal immigration due to the low agricultural productivity, accelerating the collapse of rural communities and the poverty of rural areas. According to this situation, agricultural development will play a very important role for Cambodian economic growth and poverty alleviation.
Cambodian agricultural productivity development is essential. This will lead to income generation, life stabilization, poverty reduction, and better education for the children. To achieve this, NongHyup will provide farming funds for fertilizer and agricultural machinery, and will contribute to the development of Cambodian agriculture through the provision of products and technical support that meet the needs of local farmers.
After being acquired by NongHyup Bank, SAMIC Plc, a microfinance institution with strong NGO orientation in line with its identity for farmers, was renamed to NongHyup Finance (Cambodia) Plc. With its largest organizational base and business scale in Korea, it is time assimilate its know-how and technology that will be helpful to Cambodian agricultural sector and to start full-fledged activities by focusing on rural areas.
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