"IFC Board to Review CAO’s Decision to Investigate Cambodian MFI Complaint", 3 July 2023

The ombudsman of the International Finance Corporation (IFC) has determined that a compliance investigation is warranted in response to a complaint that IFC’s investments in six microfinance institutions in Cambodia, as well as four funds and investors, contributed to harms suffered by Cambodian borrowers. However, in an unprecedented move, IFC management has requested that the IFC Board review the ombudsman’s decision – which could delay or end the compliance investigation process.

The Board has 10 working days to review the request. It may either allow the compliance investigation to move forward, reverse the CAO’s decision, or give itself additional time to review the request.

“An investigation is a crucial step toward justice and remediation for Cambodian borrowers who continue to suffer due to predatory lending,” said Naly Pilorge, outreach director of LICADHO. “The IFC management’s request for board review, after the CAO decided an investigation is merited, is a shameful ploy to avoid scrutiny. The IFC needs to prove that it is committed to accountability through the CAO and stop trying to corrupt an independent process.”…

An investigation would cover six banks or MFIs in Cambodia (ACLEDA, Amret, Prasac, Hattha Bank, LOLC, and Sathapana), and four investors or funds (Microfinance Enhancement Facility, Microfinance Initiative for Asia Debt Fund, Advans S.A., and North Haven Thai Private Equity Fund L.P.)…

“We hope this investigation can move forward as quickly as possible to advance borrowers’ right to remedy and begin to address the serious harms caused by these investments,” said Eang Vuthy, executive director of EC…