Rido Thath
"An Overview of Microfinance in Cambodia"
Microfinance has appeared in Cambodia as an NGO financial program to assist the repatriated soldiers in the early 1990s. Having initially operated under donors’ support, many NGO Microfinance Institutions (MFI) evolve. They become financially independent and are successfully transformed to be commercial banks. Recently, the number of private MFIs have grown significantly having offices in all provinces and serving their main customers, the poor, even in the most remote areas. During almost three decades of existence, there are many favorable and unfavorable development that the MFIs and their customers have faced. In the early stage of transformation to become a commercial bank, many people were worried that those MFIs would cease serving the poor. And recently, as the number of private MFIs increases, so does the number of indebted poor households. And MFIs have been finger-pointed as their loose lending policies and high interest are the main causes of this indebtedness. The government decided to regulate the interest rate by announcing the interest ceiling that is below the rate charged by MFIs, drawing concern about the sustainability of the MFIs, the possibility to access to formal finance by poor households.
