Mobile Firms Told to Spread Message: MFIs Not State-Run

Prime Minister Hun Sen on Wednesday pulled the country’s mobile operators into his aggressive campaign to clear up any confusion about the relationship between the government and microfinance institutions (MFIs), ordering them to send audio and text messages telling subscribers that MFIs were private entities.

Mr. Hun Sen said earlier this month that many people were under the false impression that debt accrued from microfinance loans was state money and could be forgiven by the government, a view he said was being pushed by rival political parties and causing resentment toward the ruling party.

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A Prasac microfinance institution ATM with its logo removed outside the Phnom Penh Post Office on Wednesday (Emil Kastrup/The Cambodia Daily)

“We now launch a campaign for a whole year, so all media outlets need to broadcast and say, ‘All microfinance institutions are private, not state-owned,’ starting from tomorrow,” Mr. Hun Sen told a crowd of ministers, professors and students at a graduation ceremony on Wednesday at Phnom Penh’s National Institute of Education.

He also called on mobile phone companies to spread the same message, noting that Cellcard had already sent out audio messages. Smart had sent a text message Wednesday’saying, “All microfinance institutions in Cambodia are private, not state-run so the people should not be confused.”

And after the country’s largest bank, Acleda, replaced its logo featuring a mythical golden bird because it resembled the Finance Ministry’s logo—at a cost of $3.5 million and the life of a construction worker who was electrocuted while replacing a sign—Mr. Hun Sen ordered one of the country’s largest MFIs, Prasac, to change its logo because it featured the same riel symbol used by the National Bank.

“Now send a message to Prasac to change the logo quickly,” Mr. Hun Sen said, warning that if any MFIs disobeyed the order, they would have their licenses revoked.

Prasac had removed signs from many of its outlets and ATMs in Phnom Penh by the end of the day, and put out a sparse new logo in the evening. It released a statement saying it was working on rebranding and would have new signs and promotional materials ready soon.

Commerce Ministry spokeswoman Seung Sophari said the public relations blitz was necessary to reach people being misled by certain politicians who were telling rural voters they wouldn’t have to pay debts if there was a change in political leadership.

“It’s a lie they try to spread among people that microfinance is part of government finance,” Ms. Sophari said, declining to name the parties or politicians spreading the claims.

“There are certain politicians that lie to [people]…to get their vote, and they spread the lie, and the people at the grassroots level need education so they don’t believe that lie,” she said.

Prince Norodom Ranariddh, the recently reinstated leader of the royalist Funcinpec party, told reporters in 2015 that he would make a sacred promise to the spirits at Wat Phnom to “cancel the debt of all the people.”

In 2013, Mr. Hun Sen said the opposition CNRP had promised to cancel debts, a pledge that he said would cause banks to close if the party won that year’s national elections.

“They have said both openly and in whispers that once they are elected, they will eliminate eve­ryone’s debt,” he said. “They have to destroy the banks in order to liberate the debtors. Otherwise, if they don’t do it, it means they have lied to the people.”

The CNRP has denied making any such promise.

Earlier this month, Mr. Hun Sen ordered officials to arrest any politicians caught saying they could cancel people’s debts accrued through MFIs.

“The political parties should not play around with this. If it’s considered to be an obvious crime, arrest them at the scene, because they cheat,” he said.

Beyond Acleda and Prasac, Ms. Sophari said other financial institutions would be under review, but the ministry was not making them public yet “because we don’t want to provoke any chaos or misunderstanding.”

(Additional reporting by Matt Surrusco)

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