More proof that land not assets used for MFI loans in Cambodia

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juansweetpotato
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More proof that land not assets used for MFI loans in Cambodia

Post by juansweetpotato » Fri Jun 23, 2017 9:27 am

Well we all know what expat MFI investors think about criticism of MFI loans by now.
One of the excuses they give for taking high percentages off the very poor is that land is rarely taken as collateral on small loans. This new report today from the PPP should show people their true colours. Of course, I don't expect the majority of them to change their ways, being - like the CPP - quite happy to exploit the desperatley poor and ignorant in any way they can.

"Hout Ieng Tong, president and CEO of Hattha Kaksekar Ltd, one of the Kingdom’s largest microfinance institutions (MFIs), said financial institutions in Cambodia rely almost entirely on real estate property as collateral for the loans they issue. He said lenders deem movable assets, such as cars, motorbikes, agricultural machinery and crops, too risky to accept as collateral given their liquidity


And another excuse they use is Loan sharks charging higher interest rates.

"Ieng Tong said borrowers can already use movable assets as collateral to obtain same-day loans at pawnshops, though pawnbrokers physically hold the asset on their premises and charge a much higher interest rate than banks and MFIs

"Total outstanding loans by banks in Cambodia exceeded $14 billion last year, with the total MFI loan portfolio surpassing $3.1 billion, according to National Bank of Cambodia data.


And the article concludes with

"Until now, we have never recorded the title of a house or land [put up as collateral by] loan-takers,” Sothearoath said. “However, this could be something we should consider in the future.”

Holly fucking shit. Talk about unregulated.

http://m.phnompenhpost.com/business/ris ... ble-assets

NB AM please take note that I didn't mention members of tof once.

Edit: Oops!
"Can you spare some cutter for an old man?"
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