Chan Veang, a mother-of-three whose small village is about an hour's drive from the country's iconic Angkor Wat temple in Siem Reap province, epitomizes the stark contrast between the success of for-profit MFIs, and the dire situation of many rural borrowers.

At her home last week, the 47-year-old, who has no regular income, laid out the paperwork for three MFI loans totaling $10,000. The forms from LOLC and Prasac, two of Cambodia's biggest MFIs, make little sense to her, she said.

"I can't read. They just told me where to put my thumb print," Veang told the Nikkei Asian Review, explaining she tried to "memorize" what MFI officers told her she owed.

Like many indebted families, Veang's three daughters and husband work in Thailand to help make repayments. Left to care for two grandchildren, Veang says she was also pressured into being a guarantor for a neighbor's loan. She said no one read her the contract.

"I said I didn't want to do it, the man said 'it'll be OK,'" she recalled. Late last month, after the neighbor absconded, credit officers came to collect.

"Five men from the organization came to my house. I did not have the money so they drove me around the village to ask to borrow money from other people. I don't know what to do, next time I'll have to hide or move to Thailand to work."

Kampoochie wrote: ↑Wed Oct 03, 2018 1:09 am On the less odious end, just getting rid of Wing would save them lots of money.

Kampoochie wrote: ↑Sun Aug 11, 2019 12:55 pm

Spigzy wrote: ↑Thu Aug 08, 2019 2:46 pm

Kampoochie wrote: ↑Wed Oct 03, 2018 1:09 am On the less odious end, just getting rid of Wing would save them lots of money.

Genuinely curious how this would help - did you see how much it cost to transfer money, or how long it took before 2009? Likewise MFIs would charge higher rates to be able to afford to employ loan officers to go and reach places where now they can rely on Wing or others for collections.

Blockchain solutions should/will do away with Wing, which I'm sure was a good solution when it first came about.

offroadscholar wrote: ↑Sun Aug 11, 2019 1:47 pm

CEOCambodiaNews wrote: ↑Sun Aug 11, 2019 12:20 pm Australia called to reassess ties to Cambodian microfinance amid reports of child labour, debt bondage
By Erin Handley
Updated about 4 hours ago

"It still hurts when the weather is cool," she said. "It's just too hard to play."

The 10-year-old was working in a Cambodian brick factory in March this year when her hand slipped into a clay-slicing machine, severing it.

"I felt nothing when I had the accident. I didn't feel any pain … I asked my mum if my hand would grow back," she said.

Pheak was working at one of Cambodia's dangerous brick factories after her family sank into debt after struggling to repay several microloans — small loans accessible to those shut out of corporate finance in the developing world.

Her mother, Khim Channa, told the ABC that she took out as many as four loans in recent years — one, of roughly $1,500, was taken from a microfinance institution called Thaneaka Phum Cambodia (TPC) using a land title as collateral.

After being unable to make the repayments, Ms Khim said loan officers came to the house to say that they would sell the land and their home.

"I was very stressed and worried that they would do it," she told the ABC. "That's why I decided to approach the brick factory owner and borrow money from them."

'Collateral damage' report links microloans to child labour
Over the last decade, Cambodia's microfinance institutions (MFIs) have been booming — proponents say that it helps alleviate poverty by giving the rural poor a leg up instead of a hand out.

But a new report by human and land rights groups titled Collateral Damage suggests that MFIs — some with ties to Australian aid — are complicit in the country's cycles of debt and land loss.
https://www.abc.net.au/news/2019-08-11/ ... t/11386962

Doesnt say how mum got into so much debt. Bit of blame to go round I'd say.
Tragic situation though, whichever you look at it.
With interest rates falling everywhere, perhaps its time to reduce that 18% ceiling on MFI loans ?
Also put some restrictions on the MFI's offsetting lower loan interest with higher admin fees.

Kampoochie wrote: ↑Thu Aug 15, 2019 5:48 am

Spigzy wrote: ↑Sun Aug 11, 2019 2:42 pm

Kampoochie wrote: ↑Sun Aug 11, 2019 12:55 pm

Spigzy wrote: ↑Thu Aug 08, 2019 2:46 pm

Kampoochie wrote: ↑Wed Oct 03, 2018 1:09 am On the less odious end, just getting rid of Wing would save them lots of money.

Genuinely curious how this would help - did you see how much it cost to transfer money, or how long it took before 2009? Likewise MFIs would charge higher rates to be able to afford to employ loan officers to go and reach places where now they can rely on Wing or others for collections.

Blockchain solutions should/will do away with Wing, which I'm sure was a good solution when it first came about.

Can you elaborate on how you see that working sorry? Reduced system cost for Wing? Removal of the agent in the middle reducing cost for the consumer? I don’t see either working practically in the Kingdom of Wonder, but happy to be wrong!

https://www.asiablockchainreview.com/na ... nt-system/



Correct about reducing the agents in the middle part — just get rid of the banks, get rid of Wing, all transactions are done digitally.