High interest rates on loans remain a big hurdle for Cambodian farmers
Sitting in front of her small house in the Chey Thorn commune of Kandal province, 35-year-old Sokhun’s face is etched with worry. She would like to plant crops on her four hectares of land, but she only has enough money to cultivate two of them. She could go to a microfinance finance institution (MFI) to borrow the additional money she needs, but the thought frightens her. “I don’t dare to borrow a lot of money with a 3-percent interest rate per month because I don’t think I can repay the loan,” she told Economics Today. She has good reason to be concerned as she has watched some of her neighbors lose their land and their homes to financial institutions when they defaulted on loans they couldn’t pay back. Hers is not an isolated case, nor are the travails of some of her neighbors. Throughout Cambodia’s rural regions, significant numbers of farmers are struggling to repay loans. If they fail to make their payments, they often have the assets they put up for collateral repossessed, leaving them without a livelihood or even a roof over their heads. …
