Sam Rainsy: European banks implicated in microcredit scandal | Covering Cambodia
Opposition leader Sam Rainsy claims that two European banks, BRED in France and Triodos Bank in the Netherlands, have shares in the Cambodian Acleda bank. It is Cambodia’s biggest commercial bank and the local leader in microcredit. It is, where Cambodians borrow their money.
According to Sam Rainsy’s opinion piece in The Brussels Times, “both banks subscribe to the concept of ‘ethical banking.’ But each has a stake of 12.5% in ACLEDA.” But why is that a problem? Banks in the microcredit sector send their salesmen out to the provinces in search of highly profitable new lending contracts. Cambodians borrow money from them to buy a motorbike, get rice seeds for planting or money for a small business. During Covid-19 crisis this becomes even more of a problem.
Loans based on the farmers’ land
Sam Rainsy writes, the salesmen would know “how to tempt their targets” with new material goods and new consumption habits. They would neglect to establish careful repayment schedules based on predictable incomes. Instead, the loans were based on a form of security, usually the farmers’ land.
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Already in 2019 the human rights NGO Licadho had exposed the causal relationship between the exponential growth of the microcredit sector and the increase in forced land sales, child labour, economic migration and human trafficking under the weight of accumulated debt.Read Opinion
- Cofibred has a stake of 12.25% (June 19, 2019)
- Triodos owns shares through several funds – all in all 6.25% (Triodos Microfinance Fund, Triodos Fair Share Fund, Triodos Sustainable Finance Foundation as at June 19, 2019)
- As a politician Sam Rainsy has a clearly biased writing style. Please read his article by taking this into account.
- I would not say that Acleda is the “most usurious bank” in a country where bank fraud is happening everyday. There are other banks that are more problematic than Acleda in Cambodia.
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