fixed term deposit risk??
fixed term deposit risk??
It looks like the EU may cancel the tax free imports from Cambodia. If so, many people in Cambodia will lose their jobs and will be unable to repay their micro finance institution (MFI) loans. What effect will this have on people who have invested money in MFI fixed term deposits? Will the MFI's bankrupt or will they be able to seize collateral from those they have made loans to? In other words, how risky is it to invest money in MFI FTD's?
There has been an MFI bubble for years already, it is going to blow up one day, but not this day.
I'd argue that FTD's are pretty safe with the big boys (WB Finance, Prasac, Amret, AMK, etc.) - if their loan portfolios start to lose performance, then they will adjust the risk by dropping interest rates on FTDs. I think that's more likely than say an MFI going bust per se - but I would stick with the big boys; there's plenty of smaller MFIs and even banks that are going to be too proud (Khmer "bong thom"/Oknha) to be acquired or merge and will go under. The National Bank has already stated that it will not bail out any PSP, MFI or bank, so you still need to be on your toes.
I'd argue that FTD's are pretty safe with the big boys (WB Finance, Prasac, Amret, AMK, etc.) - if their loan portfolios start to lose performance, then they will adjust the risk by dropping interest rates on FTDs. I think that's more likely than say an MFI going bust per se - but I would stick with the big boys; there's plenty of smaller MFIs and even banks that are going to be too proud (Khmer "bong thom"/Oknha) to be acquired or merge and will go under. The National Bank has already stated that it will not bail out any PSP, MFI or bank, so you still need to be on your toes.
Meum est propositum in taberna mori,
ut sint Guinness proxima morientis ori.
tunc cantabunt letius angelorum chori:
"Sit Deus propitius huic potatori."
ut sint Guinness proxima morientis ori.
tunc cantabunt letius angelorum chori:
"Sit Deus propitius huic potatori."
- Hairy-nosed Otter
- Expat in exile
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- Joined: Sun Mar 03, 2019 5:04 am
There is the ethical question too.
Interest rates that you or I would never sign up to - to uneducated farmers - in a country where crop disasters are par for the course - where the implications for a family loosing its #1 security/identity/livelihood has such catastrophic consequences...
On the other hand, MFI's are still cheaper than traditional money lenders...
Here is a reasonably objective overview from Bloomberg;
https://www.bloomberg.com/news/articles ... has-a-loan
Interest rates that you or I would never sign up to - to uneducated farmers - in a country where crop disasters are par for the course - where the implications for a family loosing its #1 security/identity/livelihood has such catastrophic consequences...
On the other hand, MFI's are still cheaper than traditional money lenders...
Here is a reasonably objective overview from Bloomberg;
https://www.bloomberg.com/news/articles ... has-a-loan
...then he smiled again, and slipped away, further on up the stream
Otter bro,..did you live in Cambo for a fixed term? . what is you're profession?.and sorry, I don't reply to pm's . I like Miggles.
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