Right to Relief

Krang Tbaeng community is located Kampong Speu province’s Oral district. Community members settled there prior to the Khmer Rouge regime, and many received plots of land since 1996. More than half of households have at least one member who is currently or was recently employed at a garment factory. Some families earn income by selling goods from their homes or working as day-labourers, whereas others harvest mushrooms and vegetables from the nearby forests.

In 2010, Phnom Penh Sugar Company – owned by ruling party Senator Ly Yong Phat – began clearing land that was actively farmed by community members. Despite some families having lived there since before the Khmer Rouge regime, community members were intimidated with armed guards, and some had their houses burned down. After seizing between 1.5 and 5 hectares of the community members’ land, the company filled in three water reservoirs and polluted one stream.

An estimated 100% of families borrow from microfinance institutions. Primary reasons for borrowing include to start businesses, buy motorbikes, build houses, pay for marriage ceremonies, or pay off other debts. Community members have noticed that the only thing MFIs ask about before giving loans is whether the borrower has a land title. About one-third of families have sold land in order to repay their microfinance debts, and some borrowers have also sent their under-aged children to work to earn money to repay debts. Private loans from informal lenders are also a serious problem, and are often used to repay MFI loans.

• Credit officers encouraged clients who were late on repayments to sell land.
• Sometimes COs waited many hours at customers’ houses (from 9am to 6pm) to continue asking for money. In one case, six COs came at once. In another case, a CO accused a borrower of attempting to escape after they did not see them for several days. She replied, “How can I escape? My rice cooker is here!”
• In some cases, COs directed borrowers to specific private money lenders who would give them a new loan in order to repay their microfinance loans.

• One young girl left school to work to help repay loans. Another under-aged girl used her cousin’s ID to get a job at a factory - a common occurrence in the community. She didn’t want to stop studying, but the family had debts and other financial obligations.
• Some private lenders borrow from MFIs to then lend to clients. Private lenders will then charge 15%-20% interest per month and sometimes require both a motorbike and motorbike registration card.
• Borrowers felt pressure over their children’s future and not having enough rice to eat.
• Borrowers felt ashamed about their high levels of debt, especially when speaking to their children about the debt.

The Right to Relief

Microloan providers and their international investors, including many of Europe’s and the United States’ largest development banks, have a moral obligation to address human rights abuses and provide proper remedy and redress. Cambodian borrowers must have the right to relief, or else they will continue to face debt-driven hunger, child labour, migration, coerced land sales, and many other human rights abuses raised as part of this project.

Research Background

Who We Are

Equitable Cambodia (EC) and the Cambodian League for the Promotion and Defense of Human Rights (LICADHO) are human rights NGOs registered in Cambodia. Both organisations are dedicated to amplifying the voices of grassroots communities and highlighting human rights abuses perpetrated by private and public actors in Cambodia.

What We Did

This project is based on the principles of community-based research, where community members play an active role in producing knowledge and act as co-researchers. Information was gathered from both focus-group discussions with community members as well as individual interviews. All the information in this report comes from discussions with community members and was verified with community representatives. This project is not meant as the only true source of information about microloans, but rather is meant to accurately reflect the lived experiences of community members. Many of these issues have been raised before in previous reports issued by human rights NGOs in Cambodia.

Why We Did It

Many Cambodians are drowning in microloan debt, which is leading to drastic and serious human rights violations across the country, and many people are suffering in silence. To quote one community representative who participated in this project: “I’m happy that our sadness is finally being publicised. We have kept it hidden for so long. The way [the MFIs] act is the opposite of the way they speak. Debt is the biggest problem faced by communities across the country.”

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