Cambodian borrowers owe average of US$3,800 each, as coronavirus widens debt crisis

More than 2.6 million people in Cambodia, where the average annual income is US$1,700, have used a microfinance service

Borrowers in 2019 racked up a total debt of US$10 billion to microfinance lenders, with some struggling to make repayments now amid the Covid-19 pandemic

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Over 2.6 million Cambodians owe money to microfinance providers because of limited access to traditional banking. Photo: AFP

Published: 3:00pm, 15 Nov 2020Updated: 4:56pm, 15 Nov 2020

Trapped under a mountain of crippling debt, Cambodian farmer Roeurn Reth fears she will have to sell her land to repay microfinance loans that have ballooned due to pandemic-spurred job losses in her family.

What started as a US$3,000 sum from a loan shark for her son’s wedding has now grown to about US$7,000, she says – the result of additional financial needs that have cropped up.

Her sons – who crossed illegally into neighbouring Thailand – previously sent money home to help with repayments, but they are now out of work.

Roeurm Reth, 50, fears she will have to sell her farm if she cannot repay her growing debt. Photo: AFP

“Because of Covid, we could not find jobs … and my sons do not have money,” she says tearfully, outside her modest home in northern Siem Reap province. “Now, I cannot clear my debts.”

Roeurn Reth, 50, is among more than 2.6 million people in Cambodia who have turned to microfinance because of limited access to traditional banking.

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