The Cambodia Microfinance Association (CMA) said Wednesday they had provided some form of relief to 118,000 borrowers, amid the novel coronavirus-induced economic slowdown, though providing little detail of the actions taken.
In a statement issued on Wednesday, the CMA said that 137,000 people had requested for loan relief and 118,000 had been provided relief in the form of loan restructuring, interest payment deferrals or postponement of all payments.
There was no breakdown or details of exactly what relief had been provided, only that $488 million in loans had received some form of relief.
“The MFIs can restructure the loans for customers if there is a proposal from the customers and based on the contract between MFIs and customer protection principle and other legal conditions,” the statement reads.
The statement pegged the number of microloan borrowers at 2.2 million Cambodians, with the loan relief program currently covering only 5 percent of all borrowers. But, Kaing Tongngy, spokesperson for the CMA, said the association’s 103 members were receiving around 20,000 requests for payment leniency from borrowers every week.
“The people who are rejected it is because they did not fulfill sufficient conditions,” he said, adding that the MFIs will look at the “actual impacts” of the customers.
“The association doesn’t have the number of customers that received for loan postponement from three months to six months,” he added.
On April 20, the National Bank of Cambodia had asked all financial institutions to cooperate with postponing loan repayments and to provide interest reductions in light of the pandemic. The impacted sectors were tourism, services, garments, and transportation.
At the time, microfinance institutions said they would look at any loan repayment waiver on a case-to-case basis, not committing to provide widespread relief to borrowers.
In late March, 135 civil society organizations urged the Cambodian government to ensure that microfinance institutions immediately suspend all loan repayments and interests for at least three months. This, they said, was “necessary to ensure that people can survive this crisis without risking their health or homes.”
VOA Khmer could not reach the Association of Banks in Cambodia and Chea Serey, director-general of the National Bank of Cambodia, for comments on Wednesday.
Local NGO Licadho released a briefing paper this month showing that there were around 2.6 million microloan borrowers with $10 billion in total debt.
The paper also pointed to Cambodian migrant workers returning from Thailand, who were facing the prospect of paying heavy debt with little or no economic opportunities in the country.
There are around 100,000 migrant workers who have returned from Thailand and, domestically, around 200,000 garment workers have lost their jobs or are facing work suspensions. The government estimates peg job loss in the tourism sector at 30,000 workers.
Leab Theary, a supervisor at the Crystal Martin garment factory in Kandal province, said her contract had been terminated in late April. While she had been given $1,500 as her seniority pay, she was struggling to find another job.
She asked Kredit Microfinance for loan postponement, but her proposal was rejected.
“I used to ask and told them that I lost my job and have no money to pay. They said the bank doesn’t belong to the state. It is private and the government has no right to interfere,” said Leab Theary, 34, and a mother of two in Prey Veng province.
She said she had no option but to use the $1,500 for loan repayments, potentially eating into her savings which would have been used on household expenses.