Aggressive, exorbitant and misleading lending is mushrooming across social media and mobile phone services, damaging livelihoods and the country’s financial stability, the central bank and National Police said on Thursday, pledging legal action against the lenders.
As thousands of families evicted from Angkor Wat move to a desolate relocation site, they are leaving behind plots of land they have used as collateral for microfinance loans — putting them in the tenuous position of having to repay loans without income or access to the land itself.
Hun Sen said he would visit the flooded provinces around the Tonle Sap lake starting Friday, and focused his speech on criticism that he was electioneering by doing so.
Prime Minister Hun Sen ordered local officials to crack down on illegal gambling in villages. MFIs said they will conduct their own study in response to a German microloan survey.
The watchdog group within World Bank sister organization International Finance Corporation (IFC) will assess a wide swath of the Cambodian microfinance sector after accepting a complaint alleging these lenders’ practices have caused social harms, civil society groups announced today.
Overindebtedness was a growing problem in Cambodia even before the pandemic struck. According to the Cambodia Socio-Economic Survey of 2019-2020, the average outstanding loan of $4,435 per household was an increase of around 85 percent compared to 2017 and a significant increase of 339 percent compared to 2014.
Microlender Prasac has been considered as being in default of more than $800 million in liabilities to funders due to the quality of its assets, according to its interim financial report, as credit risks rise across the microfinance sector amid a Covid-19-driven economic slump.
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