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Questioned: Survey which finds indebted workers’ suffering worsened by pandemic lay-offs

Sen David / Khmer Times Share:
Garment workers leave their factory to head home. KT

A survey, the methodology and accuracy of which has been questioned by the  Ministry of Labour and conducted by two NGOs and a union has found that tens of thousands of garment workers in Cambodia are struggling to repay microfinance debts following work stoppages and factory suspensions caused by COVID-19.


The survey was conducted by Cambodian Alliance of Trade Unions, the Center for Alliance of Labour and Human Rights and the Cambodian League for the Promotion and Defense of Human Rights and released yesterday.

Researchers surveyed more than 150 workers, most of them women, from three factories in Phnom Penh and Kampong Chhnang to investigate how workers are coping with the settlement of their debts amid mass factory closures.

The survey showed that for years, a poor living wage has forced workers to take on more and more debts to survive, adding that most of the loans taken out were borrowed from MFIs and collateralised with family land titles.

It said the research findings reflect a broken industry.

Research stated that of the 162 workers surveyed, only four did not have any debts.

It also found that almost every worker interviewed said they wouldn’t be able to repay their debts if their work was suspended, adding their lives were worse now than before they took out the loan.

“Without immediate debt relief, many of these workers will resort to selling their land or their homes, eating less food or taking out even more loans to repay their current debts,” it said.

It found that two-thirds of those surveyed had taken out at least one microloan from a bank or MFI. The most common reason people gave for taking out a loan was to pay off an earlier debt. Nearly three-quarters of those with microloans were eating less food in order to pay back what they owed.

CATU president Yang Sophorn said that garment workers have worked tirelessly to provide food for their families. “Now they can barely afford to feed themselves.”

“Without debt relief or social protection, I’m worried things are going to get worse and worse for these workers,” she said.

He said: “While the government has encouraged banks and MFIs to offer limited debt deferment to selected borrowers, this case-by-case approach to a national crisis is not enough to bring relief to the millions of struggling borrowers.”

“The fact that our researchers have continued to record debt-driven forced land sales throughout this period have made this all too clear,” he said.

The NGOs and union representatives have called for immediate debt relief programmes from both MFIs and international investors who have offered out hundreds of millions of dollars, burdening Cambodians with towering debts.

They also encouraged the government to expand borrower protection and enact enforceable, sector-wide regulations, including the temporary suspension of loan repayments and the return of land titles used as collateral, prioritising hardest-hit borrowers such as garment workers alongside vulnerable and impoverished communities and households such as those covered by the ID-Poor programme.

Central programme manager Khun Tharo said the fact that so many workers have taken on this level of debt just to cover their cost of living is alarming.

“Getting deeper into debt is just going to hurt those who’ve already been hit hardest by this crisis,” he said.

Garment workers are transported in trucks to their homes. KT

Mr Tharo said the experiences of these 162 people are not representative of every garment worker or microloan borrower in Cambodia.

“But we know their struggles are shared by some of the other 2.6 million microloan borrowers in Cambodia who, together, owed more than $10 billion in microloans at the end of 2019,” he said.

He added that Cambodia’s average microloan size is $3,804 – by far the highest in the world.

“During the COVID-19 crisis, many of these borrowers have now been left with no way to earn the money they need to pay back their loans, let alone feed their families or pay basic medical costs amid a global pandemic,” he said.

Ministry of Labour spokesman Heng Sour said yesterday that he has not seen the survey and was not informed on the method of research behind the report.

He said he would have to ask the organisations who conducted the research about their methodological approach.

“Some organisations have conducted research that did not reveal the truth behind what it was trying to cover. Some researches have even repeatedly persuaded interviewers to give false information or intentionally phrase questions to make interviewees confused,” he said.

According to the Ministry of Labour, it has paid out-of-work allowances seven times so far to workers in the garment and tourist sectors amid the pandemic, providing a total of $3.9 million to 169,161 suspended workers to help support their livelihoods during this time.

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