RANN REUY AND VINCENT MACISAAC
The Phnom Penh Post
Microfinance institutions are being asked to provide emergency loans with lower interest rates to farmers who lost crops in the worst floods to hit Cambodia in more than a decade.
However, the deputy chairman of the Cambodia Microfinance Association said that lowering interest rates could drive its members out of business.
Hout Ieng Tong, who is also the general manager of microfinance lender Hattha Kaksekar Ltd, told the Post yesterday that it was next to impossible for MFIs to lower monthly interest rates because it would cause them to lose money in addition to the licences required to operate.
“We borrow at slightly over 1 per cent a month, and with tax and operating costs we cannot provide [loans] under 1.5 per cent [per month],” he said.
If MFIs lowered their rates, they would lose money and as a result face the loss of their licences from the National Bank of Cambodia, he added, as the NBC puts a number of financial prudence regulations on the Kingdom’s MFIs, including rules for liquidity and capital reserves.
The appeal for lower interest rates and emergency loans was made by the Cambodian Centre for Study and Development in Agriculture on Tuesday, and non-government organisations providing emergency relief in flood-hit provinces are echoing that concern.
CEDAC called on the government and MFIs to create a “special credit program” for rice farmers who lost their crops in the floods that they could replant during the dry season. It recommended four-month loans at less than 1.5 per cent interest per month.
“The main problem for farmers, especially paddy rice growers, is lack of capital for planting,” CEDAC said.
CEDAC president Yang Saigkoma said the cost of planting a dry-season rice crop was between one million riel (about US$250) and 1.5 million riel per hectare. The emergency loans would help farmers buy seeds, fertiliser and petrol, and allow them to hire workers, he said.
CEDAC’s appeal was welcomed by Save the Children Cambodia, which is also urging other NGOs to support it.
“Save the Children strongly supports this appeal. We would like to urge microfinance institutions in Cambodia to take a step in helping to reduce people’s suff-ering, which is increasing,” its emergencies communications manager, Jeunsafy Sen, said.
“This is a crucial issue to advocate on,” she said.
Hout Ieng Tong said all MFIs had clients who had been affected by the floods, but there was no industry-wide data on the numbers.
About 3,000 families who had secured loans from Hattha Kaksekar had been affected by the floods, he said, adding that its interest rates ranged between 2 and 2.5 per cent per month.
Prime Minister Hun Sen said last week that flooding had destroyed about 10 per cent of the wet season’s rice crop, and affected about a million people. Rural Development Bank general director Sun Kunthor said interest rates were set by MFIs in a free market and the government could not intervene.
Even so, lower interest rates would be welcome, he said.
“If they could lower interest rates it would be great, because an ann-ual rate of 36 per cent is too high,” Sun Kunthor said, referring to the industry-average interest rate.
2 comments:
Decho Hun Sen, Mr Sam Rainsy asked you to sue him at a French court about your murders of the Khmer people. Why don't you dare to do it as you have done at the Cambodian court?
Being a strong man as well as a Prime Minister of one country, you should not be coward to face the real justice at a French court or International court. Unless, you are the real murderer in Cambodia that is the reason why you fear Mr Sam Rainsy at a real and fair justice court.
Decho Hun Sen, you rubbed the Cambodian people's well being, health care, dignity and sell Cambodia out to Vietnam in a cheap price as long as you can stay in power. Isn't that true, Samdach Decho Hun Sen?
How many Cambodian people's lives have you killed in your lifetime so far? Can you be honest to tell the truth?
As one Prime Minister of one country, you job is to bully your own people for just talking about Paris Peace agreement 1991 and about Vietnam's encroachments into Cambodia's territory. Why?
Samdach Decho Hun Sen, Why are you so scared of the truth? Why are you so scared of Mr Sam Rainsy when he asked you to sue him at a French court? You are a strong man as you claimed on the TV screen?
Samdach Decho Hun Sen, you shouldn't be scared of Mr Sam Rainsy because Mr Sam Rainsy has no weapon of mass destruction as you do. You are the murderer; you must be strong to face Mr Sam Rainsy at a French court as Mr Sam Rainsy has invited you to do so.
Samdach Decho billion dollars Hun Sen, Please face Mr Sam Rainsy as Mr Sam Rainsy has invited you through the world media. You used to win on Mr Sam Rainsy many times in a Cambodian court of justice. There is no reason why you should be worred about...if you have never killed anyone in Cambodia. Isn’t it true, Decho Sen?
The Cambodian people hope to see Samdach Decho Hun Sen has the gut as a leader or a man to sue Mr Sam Rainsy at a French court as Mr Sam Rainsy has invited Samdach Decho many times through Radio and world media.
Be a man Decho Sen! One in your life be a man Decho Sen! Be a man to face Mr Sam Rainsy at France court and international court.
We are personal bodyguards of Samdach Decho would like to see Decho Hun Sen be a man with Mr Sam Rainsy at a French Court. Otherwise, Samdach Decho is not worthy to protect because why do we have to die for protecting a traitor, a murderer, a blood sucker. Isn’t it true, Samdach Decho Hun Sen? Do you agree with that?
please help cambodia and khmer people to help ourselves, too! god bless cambodia and all our beautiful khmer people and citizens.
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