Poor Buried by Weight of Moneylenders’ Rates

Lim Vong’s family first borrowed money when his daughter fell deathly ill in 2001. Although he was unable to save the 20-year-old woman, he managed to repay Sin Sarann, the moneylender.

The same year that his daughter died, Lim Vong’s wife paid another visit to Sin Sarann and borrowed $150, but then fled alone to Vietnam. Initially, Lim Vong, 50, was unaware of the second loan taken by his estranged wife.

Earlier this year, Sin Sarann fin­ally demanded what she was owed, plus interest, a total of $1,100. When Lim Vong was unable to pay, Sin Sarann accepted his house in Svay Pak commune, Russei Keo district, instead.

“I lost the house,” Lim Vong said in a recent interview, adding that he thumbprinted the papers because he felt intimidated by the moneylender’s status.

“Nowadays I just walk around and find somebody else’s house to sleep in,” he said.

In this small ethnic-Vietnamese community on the bank of the Ton­le Sap, people know Lim Vong’s story, and many of them know Sin Sarann: “The woman in the Land Cruiser,” said one group of local boys.

Local moneylenders have carved out a niche in the Cam­bodian economy where they service people who have little access to commercial banks and need money fast. And because those people often represent a high-risk market, lenders generally hike interest rates to ensure acceptable profits.

In the case of Lim Vong and oth­ers in this community, these factors have led to a number of disputes, and accusations of in­timidation and illegal confiscation of property by several of Sin Sarann’s debtors.

“Before, a lot of people

borrowed money from her, but now they are all afraid of her,” said Ung Kim Eng, 57.

Ung Kim Eng is in a position to know. She has been in debt to Sin Sarann for two years, during which time her initial loan of $300 has swollen to a debt of $3,010 under sky-high interest rates.

The loan, which Ung Kim Eng used as capital to start a business producing fish-paste, has come back to haunt her. After repaying $500, her business failed and the debt began to grow.

“[Sin Sarann] called me and threatened that if I don’t continue payments, she will put me in jail,” Ung Kim Eng said.

The threat carries some weight in this community, because Sin Sarann is married to El Rany, Russei Keo district’s deputy police chief.

Last month, Tang Dong, another of Sin Sarann’s debtors, ac­cused El Rany of arresting him with­out a warrant. Tang Dong alleged he had been detained in Russei Keo district police station for four days before being re­leased. He has filed a lawsuit against the deputy police chief.

El Rany has repeatedly denied any wrongdoing or conflict of interest between his wife’s money-lending business and his law enforcement job.

“What I did was [in] accordance with the law,” he said.

Chhet Hang, 28, a fisherwo­man, owes Sin Sarann more than $2,500. She said last month that she once worked as a prostitute to help repay her loan, and that Sin Sarann was encouraging of such activity if it helped Chhet Hang repay the money owed her.

Sin Sarann and El Rany have denied all accusations against them and accused both Chhet Hang and Tang Dong of rabble-rousing. Sin Sarann said last week she would sue Chhet Hang for defamation. “Debtors always want their money-lenders to die,” she said, by way of explaining the numerous complaints.

Although Sin Sarann said her side of the story was not being explained, she declined to meet with reporters and spoke only briefly by telephone. Both she and her husband directed re­porters to her lawyer for comment, but then did not provide contact information.

Sin Sarann would not estimate how many people owed her money, but she said she nev­er received complaints from other communities. She said all of her transactions were documented and that anyone borrowing mon­ey from her must first agree on an interest rate and sign a contract.

Ung Kim Eng said last week the interest rate on her $300 loan was 20 percent per month, a phenomenally high amount compared to the rates generally of­fered by commercial banks, but typ­ical among Sin Sarann’s debtors.

In Channy, general manager of Acleda Bank, which has the country’s largest network of bank branches, said that average interest rates at Acleda are 1.2 percent to 4.5 percent per month.

He said he was not surprised by the double-digit rates charged by Sin Sarann and said that moneylenders often worked together to keep interest rates high. Those who frequent mon­eylenders are often lacking collateral or just need money in a hur­ry, he said.

“The bottom line is, they don’t have any choice,” he added.

Some of Sin Sarann’s debtors have said they are illiterate, and that the terms of the loans were  not adequately explained to them before they signed a contract.

Kek Galabru, founder of local human rights group Licadho, noted that rates like Sin Sarann’s were common, but added that charging poor families such high interest rates was “like robbery.”

She said the confiscation of Lim Vong’s house was inappropriate, and should have taken place through the courts.

But Lim Vong seemed re­signed to his plight. “She de­pends on her husband’s power,” he alleged. “Nobody dares stand up to her.”


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