A day after CNRP lawmaker-elect Mu Sochua appealed to microfinance institutions (MFIs) to ease up on interest rates and defer loan repayments and foreclosures for six months to alleviate the financial burden of flood-affected families, Prime Minister Hun Sen took up that very call on Friday.
Speaking at the Council of Ministers, Mr. Hun Sen said the government would issue a written statement to banks and MFIs calling for understanding from private-sector institutions as clients grapple with tough decisions in the face of mounting debts due to flooding.
“Samdech Hun Sen verbally appealed for microfinance institutions, creditors and banks, through a speech broadcast on television, not to push their clients’ backs against the wall by forcing them to sell homes or other property to return their debts,” Council of Ministers spokesman Phay Siphan said.
Mr. Hun Sen also called on lenders to provide more loans to farmers affected by flooding, which the National Committee for Disaster Management estimates to have affected 1.7 million people and killed 168.
Mr. Siphan also took a dig at the CNRP, after Ms. Sochua held a press conference at party headquarters on Thursday to issue the appeal and warned that Cambodians would start flocking to Thailand to look for work.
“We all know that the CNRP is all just rhetoric, but have no practical actions to help the people,” he said, adding that the government has done its bit to help flood-affected farmers since 2011.
Ms. Sochua had proposed on Thursday a “rights-based approach” as to how the country’s 37 MFIs could proceed for the next six months, which would include slashing interest rates to 1 percent from the current 2.5 percent.
In his written appeal on Friday, Mr. Hun Sen urged lenders to “consider extensions with understanding by not charging fines, interest or considering lowering interest rates.”
“The clients who are suffering critically from the floods and do not have the ability to repay debts on time, please favor those people by not forcing them to sell houses or land that are mortgaged properties to pay off debts or confiscating the mortgages,” Mr. Hun Sen wrote.
And like Ms. Sochua’s appeal, he said offering low-interest loans would enable families to try and recoup some of their losses by planting dry-season rice and other crops, as well as branching out into other businesses.