Measures announced by Cambodia’s banks and microfinance lenders to help clients who are unable to repay because of COVID-19 are grossly inadequate. Debt relief, the only realistic way to help these stricken borrowers, is now essential.
This is the only way out which will not lead to widespread seizures of land and property from impoverished farmers. These people were in many cases rashly encouraged to borrow to generate profits for the banks and microfinance lenders in Cambodia over the last 20 years.
As I argued in The Brussels Times in July, Cambodia’s largest microfinance lender ACLEDA has betrayed its origins as a non-profit making organisation with the mission of helping post-war refugees and widows. The bank is now a predator that preys on the very people it was intended to help. The average size of microfinance loans in Cambodia at $3,804 is the largest in the world. Yet Prime Minister Hun Sen has simply encouraged to seize property from those who can’t pay.