Cambodians sometimes have their own private finance schemes.

I was in a village one day, when a lot of people came to the house next door. I asked what was happening. They said they are having a meeting. I asked what the meeting was about. They were setting up a fund in the village, where everyone who wanted to could contribute a certain amount per month. Those who wanted a loan could then borrow from this fund. It was like micro finance but done in the village. People liked it because interest rates were lower, and it was easier to get a loan. I didnt ask in this situation, but in another similar one, the person organizing this in the first place had the right to the first loan.

Most villages have a money lender but not some dodgy bloke who does meth. It’s normally a respected member of the community, usually an old craggily old hag, who loans money at reasonable rates.

Of course they’re also the scammers.

davegorman wrote: ↑Fri Apr 05, 2019 9:58 am Most villages have a money lender but not some dodgy bloke who does meth. It’s normally a respected member of the community, usually an old craggily old hag, who loans money at reasonable rates.

Of course they’re also the scammers.

Wrong again. When a microfinance lends to someone in the village they almost always lend to a loan group of normally 3 people, at least 1 of which has to have some collateral.
This group will then be given a limit they can draw money to, lets say $1500. they are all liable for each others debts so they will often meet to discuss who needs to borrow how much for what and agree priorities. if they want to borrow more money then they can expand the group, usually by getting together with another loan group of three.
before the microfinance gives a loan it is supposed to check in with the village chief. he is supposed to keep records and stop people running up too much debt. unfortunatley he doesnt always do this and people wind up in the shit and take the whole group down with them
lending money without a license is illegal and its doen usually behnd closed doors

Username Taken wrote: ↑Fri Apr 05, 2019 9:53 am Sounds like Tong Tin.

Works well until the person in charge of the money disappears along with the money.

Definitely what it sounds like to me too, and not a bad way of giving people money when they need it. Also, I like the last man standing element of it. Way back in the day, that's how my now wife bought her first Moto.

pczz wrote: ↑Fri Apr 05, 2019 2:21 pm

davegorman wrote: ↑Fri Apr 05, 2019 9:58 am Most villages have a money lender but not some dodgy bloke who does meth. It’s normally a respected member of the community, usually an old craggily old hag, who loans money at reasonable rates.

Of course they’re also the scammers.

Wrong again. When a microfinance lends to someone in the village they almost always lend to a loan group of normally 3 people, at least 1 of which has to have some collateral.
This group will then be given a limit they can draw money to, lets say $1500. they are all liable for each others debts so they will often meet to discuss who needs to borrow how much for what and agree priorities. if they want to borrow more money then they can expand the group, usually by getting together with another loan group of three.
before the microfinance gives a loan it is supposed to check in with the village chief. he is supposed to keep records and stop people running up too much debt. unfortunatley he doesnt always do this and people wind up in the shit and take the whole group down with them
lending money without a license is illegal and its doen usually behnd closed doors

I’m talking about unlicensed money lenders not MFI you muppet.

Can't wait for his next book on Tong TIn

Cambo Dear wrote: ↑Fri Apr 05, 2019 2:32 pm

Username Taken wrote: ↑Fri Apr 05, 2019 9:53 am Sounds like Tong Tin.

Works well until the person in charge of the money disappears along with the money.

Definitely what it sounds like to me too, and not a bad way of giving people money when they need it. Also, I like the last man standing element of it. Way back in the day, that's how my now wife bought her first Moto.

I bet it was a black Honda Dream!

davegorman wrote: ↑Sat Apr 06, 2019 10:59 am

pczz wrote: ↑Fri Apr 05, 2019 2:21 pm

davegorman wrote: ↑Fri Apr 05, 2019 9:58 am Most villages have a money lender but not some dodgy bloke who does meth. It’s normally a respected member of the community, usually an old craggily old hag, who loans money at reasonable rates.

Of course they’re also the scammers.

Wrong again. When a microfinance lends to someone in the village they almost always lend to a loan group of normally 3 people, at least 1 of which has to have some collateral.
This group will then be given a limit they can draw money to, lets say $1500. they are all liable for each others debts so they will often meet to discuss who needs to borrow how much for what and agree priorities. if they want to borrow more money then they can expand the group, usually by getting together with another loan group of three.
before the microfinance gives a loan it is supposed to check in with the village chief. he is supposed to keep records and stop people running up too much debt. unfortunatley he doesnt always do this and people wind up in the shit and take the whole group down with them
lending money without a license is illegal and its doen usually behnd closed doors

I’m talking about unlicensed money lenders not MFI you muppet.

So am I. they are illegal and they do not have public meetings like the one in the OP. they work quielty in the shadows unless they are making so much money they can pay everyone off.
The maximum allowed ratee of interest is 18% as set by HE about 2 years ago. Any loan at a higher rate is illegl and if someone complains to the police or the village chief about illegal money lending the lender could be charged and the laon will not have to be repaid, at least not at the higher rate. That doesnt mean they don't exist, but life in villages is far more organised and dare I say regulated than most foreigners assume. Of course some villages have corrupt officials, no one will deny that, but by far the most corrupt people in the countryside are the local police, and money lenders are an obvious target. In general a village chiefs job is to preserve the peace in the village by sorting out disputes. He approves loans from legitimate sources like the MFI and may even be an agent for one or more. His main income is small fees for documentation and also a bit of land brokering and registering land. Its quite lucrative. He is much more likely to bend the rules himself to help someone than allow a money lender to but in on his turf. Money lenders normally deal with the drunks, unemployed junkie gambling layabouts who noone else will help and probably do not deserve anyones sympathy either. Like evrything in Cambodia there are variations from area to area and village to village but I have found most local officials are fai;lry reasonable , at least at eh bottom end of the food chain