Letter to the Editor: Distancing From MFIs Not Cure for Debtors

In “Mobile Firms Told to Spread Message: MFIs Not State-Run” (February 23) there are reports that Prime Minister Hun Sen is pulling the country’s mobile operators into his campaign to portray microfinance institutions (MFIs) as private entities.

MFIs have also been ordered to change their logos if the ones they are using now resemble those of national institutions, such as the Finance Ministry or the National Bank of Cambodia.

—Letter to the Editor—

This sudden government determination to distance itself from MFIs is officially explained by its political concern—three months before the commune council elections scheduled for June 4—that ordinary people might wrongly believe that MFIs are owned and run by the government.

This might in turn lead to the government being called to help those millions of desperate citizens, especially small-scale and poor farmers who are heavily and increasingly indebted to often abusive MFIs and are struggling daily to make ends meet, with many of them having already lost their property, especially farmland, used as collateral.

The government is in fact refusing to take responsibility for the plight of citizens living and working under its rule—who are entitled to turn to the authorities for help—and demonstrating that there is no government plan whatsoever to address the catastrophic financial situation of farmers.

This requires an urgent legal ceiling to interest rates and regulating some major private MFIs, which started as nonprofit organizations, but ended up as huge profit-making companies, having totally lost their original poverty-reduction vocation.

But a more comprehensive approach is needed.

This must include fundamental reforms in the fields of land protection and redistribution, forest and environment preservation, intelligent irrigation, improvements in agricultural productivity, and constant technical and commercial support to farmers so as to help ensure international competitiveness for Cambodia’s farm products.

Sam Rainsy

Former CNRP President

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