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LICADHO at it again: Biased reports, misleading donations and political agenda questioned

Harrison White / Khmer Times Share:
The organisation’s head office in Phnom Penh. KT/Pann Rachana

Cambodia Microfinance Association (CMA) have again released evidence against the “human rights group” LICADHO, this time finding “misleading and biased methodology” in their latest anti-MFI briefing paper.

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Khmer Times has also found faked and misleading donations published on their official website as questions are now raised about LICADHO’s true status as a civil society organisation.

The most recent briefing paper in question was released on June 30 and entitled: “Worked to Debt: Over-Indebtedness in Cambodia’s Garment Sector.”

It was co-authored by the Cambodian Alliance of Trade Unions (CATU), Center for Alliance of Labor and Human Rights (CENTRAL) and Cambodian League for the Promotion and Defense of Human Rights (LICADHO).

The group concluded that, based on the hardship of the 162 garment workers surveyed, without immediate debt relief, many of the employees will resort to selling their land or their homes, eating less food or taking out even more loans to repay their debts.

However, after a detailed study of the paper, the CMA found that the survey methodology was lacking in scientific terms, biased and lacked understanding of microfinance and that there was not enough information to be verified.

As mentioned, the survey only collected information from 162 people from three of the hundreds of thousands of factories and hundreds of thousands of workers, it stated.

Other interviewees were also recruited through “union leaders in each factory,” not randomly, which is not a reliable method because of their possible bias.

In addition, they said, the data presented in this report is inconsistent with the details of the Credit Bureau of Cambodia and the National Bank of Cambodia (NBC). The report also does not disclose the size of loans, sources of income other than factory salaries, the data of which is necessary to assess the actual impact.

The findings come only two weeks after Khmer Times reported that LICADHO had also misled the plight of cross border migrants in a video released in early May this year entitled “Driven Out: One Village’s Experience with MFIs and Cross-Border Migration”.

As blatant evidence showed, two interviewees, among the four featured in the four-minute video, had their financial situations seriously misled or possibly faked. They had also been staged to look more destitute than they were.

Khmer Times has also been investigating LICADHO’s claimed financial donors, because it lists several well-known and respected organisation as “gold donors” (USD$5,000 or more) such as the World Food Programme (WFP) on their official website signed by its president
Kek Galabru.

However, when contacted to verify those listed, the WFP said, “We have no relationship with LICADHO. “Our pipeline officer who has been with the WFP for more than 20 years also confirmed we have never provided any contribution to LICADHO,” it added.

The UK and Australian embassy’s in Cambodia said that their donations had been given in 2010 and 2011 respectively. The US embassy, which provided funding through USAID, said, “The US embassy has a long history of support for Cambodian civil society groups, including LICADHO.”

However, it did not reply to direct questions asking whether the embassy fully supported the validity of LICADHO’s research nor give exact timings or amounts of donations.

German and European Union offices acknowledged Khmer Times’ request for LICADHO  donation claims but did not provide any response.

There are now questions as to the real political agenda of LICADHO and its status as a civil society organisation because its briefing papers are increasingly now being quoted as factual evidence by those with an established anti-government agenda.

Ex-President of the now-dissolved Cambodia National Rescue Party Sam Rainsy has been quoting LICADHO in various international media outlets as evidence that the government needs to overhaul the industry.

He wrote, “Research published jointly by LICADHO and local trade unions in June shows the realities of microfinance during COVID-19. Without immediate debt relief, thousands of Cambodian workers will have to sell their land or their homes, or eat less to repay their debts”.

He added foreign financial institutions that “invest” in Cambodian microfinance including, French bank BRED, Triodos of the Netherlands, and Sumitomo Mitsui of Japan, all of which have stakes in ACLEDA Bank are a part of the problem too.

Human Rights Watch also quoted LICADHO this week when it said, the Cambodian government and the NBC should urgently suspend debt collection and interest accruals for micro-loan borrowers who are no longer able to meet their debt payments because of COVID-19.

The micro-loan providers are likewise failing in their human rights responsibilities to borrowers, they added.

That said, various government bodies have already acknowledged – that like any financial industry around the world – Cambodia’s microfinance industry can make improvements in regulation and policy.

They outlined the need for lenders to assist struggling borrowers at all times and especially as the COVID-19 pandemic hits the global economy.

The NBC understood this when it enforced, against industry requests, regulations of an 18 percent per annum interest ceiling in 2017. This decision was based upon long-term and widespread discussions and in consultation with verified independent research.

The Association of Banks in Cambodia in April expressed its full support to implement the NBC’s “Circular on Loan Restructuring” to maintain financial stability and relieve the burden of borrowers whose main sources of income are affected by the pandemic.

Khmer Times has and will continue to report fairly on any shortcomings of the microfinance industry as well as the shortcomings of organisations such as LICADHO, in the hope to truly understand and better assist the enterprises.

For reasons only known to the Director of LICADHO Naly Pilorge  – who has written extensively for international publications on the importance of transparency and openness in Cambodia – LICADHO refuses to enter into any dialogue with this publication.

Khmer Times has even offered to organise an open policy discussion between Cambodia Microfinance Association, LICADHO and any relevant organisations to discuss any recommendations or concerns with the industry, but Pilorge  has again chosen not to comment.

This can be seen to be to the detriment of those she purports to stand up for.

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