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.
The Cambodian economy has recovered to pre-pandemic levels in several areas, but instability around the world threatens its outlook, a World Bank report said today.
A large public survey of rural Cambodian households commissioned by the German government to investigate microloans found over-indebtedness, pressure to sell land and aggressive door-to-door marketing, and calls for phasing out public funds from the sector.
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.
Prasac Microfinance Institution claimed to the Supreme Court that a critical Facebook video was defamation against it, while the defendant claimed he was telling the truth about a bad deal.
As the pandemic spreads through workplaces, income loss and mounting debt are shocking households now and could hold longer-term adverse effects for Cambodia’s economy, according to a series of reports.
Six youth activists were detained for a night for collecting thumbprints — despite the ongoing Covid-19 outbreak — for a petition calling on the government to ease citizens’ costs of living, the Phnom Penh governor said.
A 70-year-old man in Kampong Speu province confessed to stabbing his second wife to death because she had fallen deeply in debt, borrowing from private lenders to pay microfinance institutions and vice versa, local police and a commune chief said.
A Kampong Speu construction worker borrowed $3,000 from a private lender and poured it into a scam investment that went bust. The day before a payment was due on his loan, his son found him dead.
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