There is a debt crisis slowly but surely building in Cambodia that could see millions of people losing their homes and family farms — the result of microlending run amok amongst 15 percent of the population. And while the individual loans are small — relatively speaking — the total amount of debt is anything but “micro” — in all, Cambodian consumers owed $8 billion in loans as of the start of 2019, and the situation is teetering on the edge of becoming a full-blown debt crisis with sharp economic and political ramifications.
“It is a big issue, and it’s one that could have political ramifications,” said Ou Virak, director of Phnom Penh-based think-tank Future Forum told Bloomberg. “Since there is no personal bankruptcy protection, delinquency could and will likely lead to the repossession of homes or family farms.”
This potential displacement of million, Virak noted, is a serious problem — and one where it remains unknown which side the government will choose.
© 2019, The Cambodia Daily. All rights reserved No part of this article may be reproduced in print, electronically, broadcast, rewritten or redistributed without written permission.