"Green bonds, red flags: Cambodia’s microfinance crisis deepens amid sustainability push", 10 October 2024

When Davuth fell behind on his microfinance loan earlier this year, a credit officer visited his home in Ratanakiri province almost daily. The officer pressured him to borrow from neighbourhood lenders or sell his farmland – his main source of income and livelihood, he said.

“I replied that if I sold my land, which includes my cashew and cassava crops, I’d rather die,” Davuth, a Kachok Indigenous man, said in August. He requested a pseudonym, fearing reprisals.

He claimed the credit officer, representing microfinance institution LOLC Cambodia, threatened and intimidated him until his first suicide attempt ...

Davuth is not the first to report such threats. LOLC is currently under investigation by the International Finance Corporation (IFC)’s watchdog over unethical lending practices, as previously reported by Dialogue Earth.

… Microfinance was designed to lift people out of poverty. Instead, for Davuth and many others, it has become a trap. “I feel desperate about the debt; I can’t even feed my family well,” he says. “All the money I make goes to repaying the loan.”

… In an email, an LOLC Cambodia spokesperson said the microfinance institution has a “robust complaints mechanism and an internal audit system that has not encountered accusations of this nature.” …

… In an email, Cambodia Microfinance Association spokesperson Kaing Tongngy stated that the association has “zero tolerance for any malpractices by its members,” which must comply with its code of conduct and lending guidelines. He added that LOLC holds a gold certificate in client protection, demonstrating “its commitment to the international standard with strong social performance management including client protection principles”…