The suffering of millions of Cambodians who are facing economic hardship due to the COVID-19 pandemic is being amplified by the country’s ongoing over-indebtedness crisis, stemming from more than $10 billion in loans from aggressive microfinance institutions (MFIs). More than two and a half million Cambodians currently hold microloans, with an average loan of more than $3,800 – the largest amount in the world. This puts millions of Cambodians’ livelihoods, health and land tenure security at risk.
The government must ensure that MFIs immediately suspend all loan repayments as well as interest accrual on loans for at least three months and return the millions of land titles currently held as collateral by MFIs to their owners. These actions are necessary to ensure that people are able to survive this crisis without risking their health or homes, and are able to avoid further risky loans that could lead to bonded labour, human trafficking and other human rights abuses.
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