Scrooge-"Are there no prisons?"
"Plenty of prisons..."
Scrooge-"And the Union workhouses." . "Are they still in operation?"
"Both very busy, sir..."
"Those who are badly off must go there."
"Many can't go there; and many would rather die."
Scrooge- "If they would rather die," "they had better do it, and decrease the surplus population."
Strangled in Debt
Rob W is correct about informal lenders. It’s 20% a month. Makes the lending institutions look cheap. Why is there no option like Afterpay in Australia where you pay in 4 instalments for free but get whacked with fees when late.
Afterpay shares dropped to $12 in March but by Christmas had rebounded to $100 plus.
Afterpay shares dropped to $12 in March but by Christmas had rebounded to $100 plus.
- Bong Burgundy
- A Moment of Clarity
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Western Investors Are Losing the Ability to Shape the Future of Cambodian Microfinance
The industry’s foreign financial backers are now aware of the scale of the country’s over-indebtedness – but they have lost the ability to do much about it.
Western microfinance investors worried about over-indebtedness in Cambodia are losing the ability to shape the practices of an industry whose rapid growth they helped to foster.
Microfinance in Cambodia started in the 1990s as a form of foreign aid aiming to help rebuild a country recovering from war. It has since grown into a profitable industry, with the number of microfinance borrowers increasing from 175,000 in 2000 to 2.6 million in 2020. The country now has one of the world’s highest rates of microfinance debt relative to personal income.
In Cambodia and elsewhere, microfinance lenders commonly present anecdotal evidence about relatively well-established small businesses benefiting from credit as proof of their “impact.” Academics argue that there is no statistically robust evidence that microfinance lending does any good overall. It is, in fairness, hard for anyone to prove whether or not the success stories would have happened without microfinance. But focusing on the successes ignores the failures, and the human costs to those who are struggling to service their loans.
The average microfinance loan size in Cambodia reached $4,213 in December 2021, according to University of London research, about double the country’s annual GDP per capita. Rather than helping people to escape poverty, the research argues, the loans are often the catalyst for harmful “coping strategies” that are necessary to ensure repayment. These include borrowing and/or working more, eating less, selling assets, and leaving farming to work in brick kilns or as low-skilled migrant laborers in Thailand.
Continues: https://thediplomat.com/2023/02/western ... rofinance/
The industry’s foreign financial backers are now aware of the scale of the country’s over-indebtedness – but they have lost the ability to do much about it.
Western microfinance investors worried about over-indebtedness in Cambodia are losing the ability to shape the practices of an industry whose rapid growth they helped to foster.
Microfinance in Cambodia started in the 1990s as a form of foreign aid aiming to help rebuild a country recovering from war. It has since grown into a profitable industry, with the number of microfinance borrowers increasing from 175,000 in 2000 to 2.6 million in 2020. The country now has one of the world’s highest rates of microfinance debt relative to personal income.
In Cambodia and elsewhere, microfinance lenders commonly present anecdotal evidence about relatively well-established small businesses benefiting from credit as proof of their “impact.” Academics argue that there is no statistically robust evidence that microfinance lending does any good overall. It is, in fairness, hard for anyone to prove whether or not the success stories would have happened without microfinance. But focusing on the successes ignores the failures, and the human costs to those who are struggling to service their loans.
The average microfinance loan size in Cambodia reached $4,213 in December 2021, according to University of London research, about double the country’s annual GDP per capita. Rather than helping people to escape poverty, the research argues, the loans are often the catalyst for harmful “coping strategies” that are necessary to ensure repayment. These include borrowing and/or working more, eating less, selling assets, and leaving farming to work in brick kilns or as low-skilled migrant laborers in Thailand.
Continues: https://thediplomat.com/2023/02/western ... rofinance/
Bringing the news. You stay classy, nas, Cambodia.
- ផោមក្លិនស្អុយ
- Daylight, I need Daylight !?!
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It’s not just micro finance. Over the past few months I have heard 2 concerning stories about malicious bank loan officers fabricating supporting docs for a sizeable loan.
The second one was a loan for $45,000, my colleague asked me to read over the documentation, it was all nonsense, aggressively driven by the loan officer who I guess is on commission for making loans but has also asked for an under the table £500 to be shared between him and his boss for facilitating the loan.
Several documents were created on instruction from bank staff to ‘prove’ repayment affordability. They weren’t even inflated or exaggerated numbers - they were completely fictitious.
When i advised my colleague to step away the bank staff became quite forceful and persistent.
The whole bloody thing is a house of cards.
The second one was a loan for $45,000, my colleague asked me to read over the documentation, it was all nonsense, aggressively driven by the loan officer who I guess is on commission for making loans but has also asked for an under the table £500 to be shared between him and his boss for facilitating the loan.
Several documents were created on instruction from bank staff to ‘prove’ repayment affordability. They weren’t even inflated or exaggerated numbers - they were completely fictitious.
When i advised my colleague to step away the bank staff became quite forceful and persistent.
The whole bloody thing is a house of cards.
There is another debt scam going on in the boreys. They will sell one to just about anyone who can muster a small deposit.
The deal is pay the first X months to the borey itself (while they actually construct it) and once its finished and you have paid up 35% equity, they will hand your debt over to "their partner bank" who will treat you all nice and cuddly.
When the time comes their partner bank is of course not their partner at all but a standard commercial bank acting in standard commercial ways. They tell you no way do you qualify for the loan.
The borey takes the house back and sells it to the next mark.
Edit: Or of course you go to the informal lenders.
Nice.
The deal is pay the first X months to the borey itself (while they actually construct it) and once its finished and you have paid up 35% equity, they will hand your debt over to "their partner bank" who will treat you all nice and cuddly.
When the time comes their partner bank is of course not their partner at all but a standard commercial bank acting in standard commercial ways. They tell you no way do you qualify for the loan.
The borey takes the house back and sells it to the next mark.
Edit: Or of course you go to the informal lenders.
Nice.
- ផោមក្លិនស្អុយ
- Daylight, I need Daylight !?!
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Interesting. There are several houses in my Borey that the neighbours say the Borey keeps taking back… I wonder if they are in on the gameRobW wrote: ↑Fri Feb 03, 2023 9:19 amThere is another debt scam going on in the boreys. They will sell one to just about anyone who can muster a small deposit.
The deal is pay the first X months to the borey itself (while they actually construct it) and once its finished and you have paid up 35% equity, they will hand your debt over to "their partner bank" who will treat you all nice and cuddly.
When the time comes their partner bank is of course not their partner at all but a standard commercial bank acting in standard commercial ways. They tell you no way do you qualify for the loan.
The borey takes the house back and sells it to the next mark.
Edit: Or of course you go to the informal lenders.
Nice.
- Bong Burgundy
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Cambodia launches project to promote financial literacy at local level
PHNOM PENH (Xinhua): The National Bank of Cambodia (NBC) and the Cambodia Microfinance Association (CMA) have jointly launched the "Safe Finance in Community" project to promote financial literacy, rights and consumer protection in communities, a press statement said on Monday (Feb 27).
The project, launched last Friday, aimed to improve the safe and secure use of formal financial services at the local level and to increase access to these services, the statement said.
It will be piloted in Kampong Thom, Kampong Speu, Svay Rieng, and Battambang provinces in 2023 and expanded in the following years, the statement added.
"Public confidence in the formal financial sector is crucial," said Rath Sovannorak, director general of the NBC's Banking Supervision.
"The NBC and stakeholders have been putting great efforts in strengthening financial literacy and consumer protection to maintain the stability of the whole banking system and to increase financial inclusion in Cambodia," he added.
CMA Chairman Sok Voeun said the project's implementation requires close coordination and collaboration among stakeholders, including citizens and local authorities.
"We are confident that it will contribute significantly to enhancing financial literacy, rights and consumer protection in Cambodia," he said.
The country currently has approximately 86 microfinance institutions, with 2.1 million credit accounts and 2.6 million deposit accounts, according to the NBC.
PHNOM PENH (Xinhua): The National Bank of Cambodia (NBC) and the Cambodia Microfinance Association (CMA) have jointly launched the "Safe Finance in Community" project to promote financial literacy, rights and consumer protection in communities, a press statement said on Monday (Feb 27).
The project, launched last Friday, aimed to improve the safe and secure use of formal financial services at the local level and to increase access to these services, the statement said.
It will be piloted in Kampong Thom, Kampong Speu, Svay Rieng, and Battambang provinces in 2023 and expanded in the following years, the statement added.
"Public confidence in the formal financial sector is crucial," said Rath Sovannorak, director general of the NBC's Banking Supervision.
"The NBC and stakeholders have been putting great efforts in strengthening financial literacy and consumer protection to maintain the stability of the whole banking system and to increase financial inclusion in Cambodia," he added.
CMA Chairman Sok Voeun said the project's implementation requires close coordination and collaboration among stakeholders, including citizens and local authorities.
"We are confident that it will contribute significantly to enhancing financial literacy, rights and consumer protection in Cambodia," he said.
The country currently has approximately 86 microfinance institutions, with 2.1 million credit accounts and 2.6 million deposit accounts, according to the NBC.
Bringing the news. You stay classy, nas, Cambodia.
This is a good idea, but the poorest of the poor don't have other options, and, iirc, microfinance institutions charge higher rates of interest than many banks.
Default on debt, lose the security, which is often a small house
Needs tougher regulations on MFIs
Default on debt, lose the security, which is often a small house
Needs tougher regulations on MFIs