Logo of Phnom Penh Post newspaper Phnom Penh Post - MFIs downplay debts

MFIs downplay debts

A resident of Phnom Penh’s Meanchey district navigates through a flooded street after torrential rainstorms
A resident of Phnom Penh’s Meanchey district navigates through a flooded street after torrential rainstorms swept through the Kingdom last month. Heng Chivoan

MFIs downplay debts

Two of the leading microfinance institutions (MFIs) in Cambodia said yesterday that they have identified a relatively small fraction of borrowers who were affected by flooding and would provide relief on their repayment schedules if necessary.

The comments come after both Prime Minister Hun Sen and members of the opposition Cambodia National Rescue Party called on MFIs to do more to help ease the financial burden of the indebted amid destruction wrought by flooding.

Speaking at the Council of Ministers on Friday, Hun Sen called for understanding from private and registered lenders, suggesting grace periods for repayment, cancelling late penalties and forgoing interest rates.

In addition to causing more than 100 deaths, the rising waters have damaged hundreds of thousands of crops, wrecked infrastructure and put farmers who took out loans to pay for basic commodities in debt.

MFIs, though, cautioned that the number of people struggling to repay loans is small.

Chea Phalarin, chief executive officer at the second-largest MFI, Amret, said yesterday that his firm had already reported to the central bank the number of clients affected by floods.

“We are considering the suggestion from the government, and we judge based on obvious situations,” Phalarin said. He added that operators need to avoid being cheated from false claims.

Sim Senacheert, general manager of the leading MFI, Prasac, identified 300 families out of nearly 180,000 borrowers that were so devastated by the floods that they may require a renegotiation of terms.

“It is not a new issue, and it is not a serious concern,” he said.

Neither were able to provide statistics on unofficial money lending, which is often the cause of skyrocketing debt due to high interest rates.

Loans at Cambodia’s 35 microfinance institutions reached close to $1.2 billion at the end of September, according to recent data from the Cambodia Microfinance Association. It is estimated that about 30 per cent of loans are for agricultural production.

In his remarks, Hun Sen stresses that his suggestions were not for all people in debt.

“I just call for [understanding] for people who suffered from floods or any who really use the loan to expand business. I don’t call for those who take the loan for gambling.”

MOST VIEWED

  • NagaWorld casinos set to reopen, schools to follow

    NAGACORP Ltd has requested that it be allowed to reopen its NagaWorld integrated resorts in Phnom Penh after the government recently approved casinos to operate again, provided they follow Covid-19 prevention measures set by the Ministry of Health. Mey Vann, the director-general of the Ministry

  • ASEM supports Kingdom’s proposal to postpone meeting amid Covid

    The 13th Asia-Europe Meeting (ASEM13) scheduled to be held in Cambodia in November has been postponed until mid-2021 due to the Covid-19 pandemic, a Ministry of Foreign Affairs and International Cooperation press statement released on Saturday said. The decision was made during a two-day meeting

  • Coffee maker roasted for producing fake product

    The Ministry of Interior’s Counter Counterfeit Committee will send a suspect to court on Monday after she allegedly roasted coffee mixed with soybeans and other ingredients, creating a product which could pose a high risk to consumers’ health. On the afternoon of July 2, the

  • Cambodia armed with money laundering laws

    Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday. Comprising nine

  • Schools to be reopened in ‘three stages’

    With guidance from Prime Minister Hun Sen, the Ministry of Education, Youth and Sport, is in the process of reopening schools in three stages. But no timeline has been set, ministry spokesperson Ros Soveacha said on Thursday. Soveacha said the first stage will be to

  • Thai border crossings eased

    The Cambodian Embassy in Thailand said in an announcement on Wednesday that Thailand’s government has allowed certain passengers from several countries to enter its borders. The visitors must go back to their country immediately after their duties in Thailand are fulfilled, the embassy said.

  • Gov’t says tourism recovers slightly despite pandemic

    The Ministry of Tourism and the Phnom Penh municipal administration have recognised 33 tourism businesses in the capital which have consistently implemented safety measures for tourists and adhered to the code of conduct issued by the ministry. Recently, the ministry announced that tourism businesses had to

  • Mull ASEAN border opening, PM urges

    Prime Minister Hun Sen has requested that ASEAN launch a scenario for gradually reopening cross-border travel and trade between countries in the region. He said ASEAN has had more success combating Covid-19 compared to other regions. The prime minister’s request was made at the

  • Ministry reports 11 new Covid-19 cases, reiterates vigilance

    Minister of Health Mam Bun Heng has urged people to continue practising virus prevention techniques after 11 people tested positive for Covid-19 within two days after arriving in the Kingdom. Speaking on Sunday, Bun Heng stressed the importance of washing hands, wearing masks or scarves when

  • Koh Rong land ‘belongs to firm’

    Preah Sihanouk Provincial Administration spokesperson Kheang Phearum told The Post on Sunday that the 35ha being bulldozed by Royal Group Co Ltd in Koh Rong belongs to it after it was leased to it for 99 years by the government in 2008. Phearum said the land does