Internal Control Of Community Finance Institutions In Cambodia

The working paper offers a conceptual basis for action research on internal controls in community finance institutions (CFIs) in rural Cambodia. A CFI is defined as “an institution that specializes in delivering financial services and is owned and controlled by its members within a local community.” High illiteracy levels are a barrier to the rise of quality democratic institutions and quality financial services (especially savings) among hundreds of millions of the world’s poorest people. A related barrier is the reluctance of poor people to assert their rights – a reluctance compounded by functional illiteracy. The paper works within a shareholder rights framework to building institutions. It makes the case that practitioners must be much more aware of the control needs – and the information management needs -- of shareholders in predominantly oral societies. Given that awareness, it makes the case that REFLECT ‘literacy circles’ can be adapted effectively to improving the quality of CFIs.