The dark side of microfinancing in Cambodia

While a recent report by two civil society groups in Cambodia outlining predatory practices by local microfinance institutions (MFIs) may not paint the clearest picture of the sector, there is no denying that there are murky waters ahead.

The report by the Cambodian League for the Promotion and Defense of Human Rights (LICADHO) and local NGO Sahmakum Teang Tnaut (STT) documented numerous cases of coerced land sales, child labour, debt-driven migration, food insecurity and other human rights abuses during interviews of 28 households that were unable to repay their debt.

“Each of these individual issues raises serious concerns (and) they are likely to become more routine and widespread as the levels of debt in Cambodia continue to grow,” stated the report titled ‘Collateral Damage: Land loss and abuses in Cambodia’s microfinance sector’.

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