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MFI loans used for illegal logging

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Villagers display paperwork alongside environment officials after explaining that they used loans from microfinance institutions to buy equipment to illegally log and transport timber. Photo supplied

MFI loans used for illegal logging

A conservation NGO official yesterday said he planned to ask microfinance lenders to better scrutinise their loans after a spate of cases over the last month showed that such loans had been used by illegal loggers to purchase chainsaws and tractors for transporting timber.

The Natural Resource and Wildlife Preservation Organisation stopped around 250 timber transporters in Kampong Speu, Kratie and Pursat provinces over the last month, only to find that many had used microfinance loans to pay for equipment used in their illicit activities, said the NGO’s director, Chea Hean.

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NGO director, Chea Hean poses for a photograph during an inspection for illegal timber transportation busts last month in Kampong Speu province. Photo supplied

“Some transporters got $1,000, $2,000 or up to $3,000 loans to buy chainsaws, tractors or makeshift trucks to haul the timber illegally,” Hean said yesterday.

While some had showed the organisation their loan papers, many requested that the authorities not seize their equipment because they needed it to earn money in order to pay back their loans, Hean added.

Hean’s claims were backed by Nov Nak, deputy director for Kampong Speu’s Environment Department, who said that in such cases authorities would educate transporters, asking them not to repeat the offence.

“If we crack down and seize the timber and vehicles, that just causes them serious problems because they have no money to pay back the department,” Nak said.

Hout Ieng Tong, president of Cambodia Microfinance Association, said microfinance institutions already employed policies that prevented them from issuing loans for illicit activities such as illegal logging, drug smuggling and illegal fishing.

But, he added, it is difficult to monitor clients who misrepresent their intentions at the time of taking the loan.

“If they tell us honestly that they will use a loan to purchase chainsaws or trucks [for logging] we will reject it,” he said.

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Two NGO workers and a driver pose after they were arrested on Monday for allegedly extorting money from a wood transported in Pursat province. Photo supplied

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