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I came across a thread about a monk killing a motodup over (apparently) a loan and the thread derailed into the subject of loans in Cambodia. A subject worth a thread of its' own I think.

Let me start by saying I don't do loans. First of all I don't want the worries of getting the money back, second, if I would loan money, I'd have to charge crazy interest rates to ever get my money back. Charging 15-20% (or even higher rates) for a loan feels unethical in a country where most people (at least where I live) are still dirt-poor.
But... If I would charge reasonable rates (let's say 3-5% per year) I would never be paid back. The person I loaned the money to would pass the loan on to someone else, charging 15-20% (or more) thus making money from my money.

Because I'm such a Cheap Charley with loans the amount of request has dried up completely. It's not I never provide financial support, but never with a loan. Don't feel like being burnt again. It's that simple.

<edited for typos>

You're preaching to the choir in my case.

Mrs Cargo has given out 'loans' to 'friends' who have not paid her back...after she hassled them for payment they either 'unfriended' her or changed their sim card. I mention 'loans' coz they might as well say 'can you give me some money'.

I think she's learnt a lesson.....hopefully.

Cambodians love to borrow money but hate to pay it back. Interest rates are calculated monthly not yearly - 4% is normal, higher also common. Do not lend any money that you can not afford to lose. Do not lend to friends. Do not lend to anybody without documentation. Do not lend money!

Collateral....
Never loan without first collecting their original national ID Card, family book and smart phone at a minimum.
Passport, Moto, car, vehicle tax/I'd card are additional security.

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lostjeremy wrote: ↑Tue Aug 20, 2019 4:12 pm Collateral....
Never loan without first collecting their original national ID Card, family book and smart phone at a minimum.
Passport, Moto, car, vehicle tax/I'd card are additional security.
A xiffdr
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There's a difference between being cautious and a Shylock.

"Neither lender nor borrower be. For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry."

Hamlet.

I've found that the best way of avoiding loan hassles is to simply not loan money at all. Neither to Western friends (who are often just as equally likely to give you hassle about paying it back) or Khmers.

People might say that's a bit tight of me and that I should put myself in their shoes and what if I was ever desperate enough to need to borrow money - My answer is that is I've always made sure I have enough money to sustain myself, even in a crisis. Partly because I never lend it out.

Borrowing money to buy property or start a business is one thing, but the fact that someone is desperate to borrow money to get them through the month should tell you something about their attitude towards money, which will inevitably roll over to their attitude towards paying you back.

clutchcargo wrote: ↑Tue Aug 20, 2019 1:32 pm Mrs Cargo has given out 'loans' to 'friends' who have not paid her back...after she hassled them for payment they either 'unfriended' her or changed their sim card. I mention 'loans' coz they might as well say 'can you give me some money'.

I think she's learnt a lesson.....hopefully.

In Asia, I've noticed that 'could you loan me $100 dollars' usually means 'can you give me $100 dollars'. I've seen family ask each other for loans they full well knew they couldn't pay back.

My wife chastises me for even mentioning money to her family. None of whom need a loan but she doesn’t want anyone knowing as there’s a chance they will ask for a loan. A very proactive approach to money lending if you ask me. Plead poverty and they won’t even think to ask.