A new report has found that 28.1 per cent of Cambodians borrow money to pay for healthcare, with microfinance insiders claiming it does not reflect the reality in the financial sector.
The University of New South Wales (UNSW) surveyed 5,000 households across Cambodia and found that of those who borrowed money for their healthcare, 55 per cent experienced distress health financing.
Co-lead author Dr Augustine Asante, of the School of Public Health and Community Medicine at UNSW Sydney, said the study sent a clear message that Cambodia’s healthcare system is inadequate in achieving the protection necessary to move towards universal coverage.
“Cambodia has made good progress in terms of enhancing the equity of its health financing system, but there is a great deal of work left to be done to reduce out-of-pocket expenditure, especially for its poor and most vulnerable citizens,” Dr Asante said.
The report said the median loan was $125-$200 for loans with interest and $75 for those without.
“The average period to pay off the loan was eight months, while 78 per cent of households had failed to pay off loans taken more than 12 months before the survey,” it states.
Vithey Microfinance Plc CEO Bun Mony told The Post on Wednesday that rural Cambodians usually took out small loans from unofficial lenders in an emergency, mostly medical.
“If they borrow money from unofficial lenders to pay for healthcare, they face higher risk than other licensed financial institutions because they have to pay high interest rates,” Mony said.
The report said facing financial ruin for medical treatment is common in Cambodia, where out-of-pocket spending makes up 60 per cent of total healthcare expenditure – one of the highest percentages in Southeast Asia.
Cambodia Microfinance Association chairman Kea Borann said in practice the Kingdom’s financial sector does not issue loans dedicated to medical procedures.
However, he said most Cambodians in rural areas frequently used some part of their loans for healthcare.
“Taking out loans isn’t inherently bad or good – they are needed whether it be for business or personal use for medical treatment. Should people not take them? Should they wait to die or take out loans to help?” Borann said.
Dr Asante said $200 was a large sum of money to people in low socio-economic households.
“If you live in Australia, you might think $200 is not huge, but in rural Cambodia it’s about seven per cent of annual household income.
“Poverty is a key thing, of course, when it comes to what determines who suffers from distress health financing, because poorer households are more likely to borrow with [high] interest,” Dr Asante said.