Licadho and STT report on microfinance distorted

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After an initial review of the Licadho and STT report released on August 7 2019 entitled “Collateral Damage”, which purports to show the prevalence of unethical lending practices by microfinance institutions (MFIs) in Cambodia, the Cambodia Microfinance Association (CMA) calls on the report’s authors to engage proactively with the Association in order to provide a more complete picture about the true nature of lending in the microfinance sector.

The report in its current form paints a relentlessly negative picture of microfinance lending and uses a tiny sampling of anonymous borrowers to portray the whole industry in an unrealistic and negative light.

The CMA takes these reports very seriously and we have been working with our members to try to investigate the background to the handful of case studies presented in the report which depict negative outcomes for this small group of borrowers.

Moreover, as the report has used anonymous sources in its case studies we have been unable to look properly at the circumstances behind the loan history of these anonymous borrowers.

As the only industry Association representing the Microfinance sector in Cambodia, the CMA has put in place stringent lending guidelines designed to avoid such isolated incidents and we constantly monitor lending practices to safeguard against unethical practices.

We therefore urge the report’s authors to provide CMA full details on these case studies so we can work with our members to understand the background.

Cambodia Micro Finance Association

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