There was a good piece in today's Bangkok Post about the level of individual debt in rural cambodia, most of it to microfinance organisations. Licahdo are saying it's one of the highest rates in the world. I'm not sure how they measure that, but given the income of these people it is clearly a significant problem.
If they are charging up to 30% to some borrowers, it makes more sense that they pay investors 7-8%, but i would be very worried about long-term sustainability.
https://www.bangkokpost.com/world/20199 ... VxHvkyig7M
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Another analysis:Guest wrote: ↑Mon Nov 16, 2020 6:00 pmThere was a good piece in today's Bangkok Post about the level of individual debt in rural cambodia, most of it to microfinance organisations. Licahdo are saying it's one of the highest rates in the world. I'm not sure how they measure that, but given the income of these people it is clearly a significant problem.
If they are charging up to 30% to some borrowers, it makes more sense that they pay investors 7-8%, but i would be very worried about long-term sustainability.
https://www.bangkokpost.com/world/20199 ... VxHvkyig7M
http://www.phnompenhpost.com/special-re ... nce-sector
- Felgerkarb
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Funny. A few years ago, Cambodia was praising that it had the best repayment rate in the world on small loans. I am sure there is a thread here somewhere where I warned everyone that was utter bullshit.
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Why are the gods such vicious cunts?
Where is the god of tits and wine?
Why are the gods such vicious cunts?
Where is the god of tits and wine?
- Orichá
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Both articles barely mention the significant difference between "informal" lenders -- that demand much higher interest rates -- and the legally registered MFIs. Unofficial loan sharks charge 30% and more, and that is what is trapping some of the villagers mentioned in the Bangkok Post article...
By law, MFI lenders are supposed to charge no more than 18% maximum interest on loans, according to the prakas almost two years ago. However, despite these laws, I was told by MFI directly, that in the past in the deep countryside, their local agents had been caught charging their own interest rates on top of the official MFI rate, which again, further muddies the statistics...
Here is a detailed report that explains how some of the lenders have abused their power by pressing local folks to sign over land titles in lieu of cash payments, should they default... It is distressing, and makes me regret somewhat investing a pretty piece of change in one of the more rurally focused MFIs, although the one I invested with isn't mentioned in this report as one of the more nefarious institutions currently playing the field...
https://www.licadho-cambodia.org/reports.php?perm=228
By law, MFI lenders are supposed to charge no more than 18% maximum interest on loans, according to the prakas almost two years ago. However, despite these laws, I was told by MFI directly, that in the past in the deep countryside, their local agents had been caught charging their own interest rates on top of the official MFI rate, which again, further muddies the statistics...
Here is a detailed report that explains how some of the lenders have abused their power by pressing local folks to sign over land titles in lieu of cash payments, should they default... It is distressing, and makes me regret somewhat investing a pretty piece of change in one of the more rurally focused MFIs, although the one I invested with isn't mentioned in this report as one of the more nefarious institutions currently playing the field...
https://www.licadho-cambodia.org/reports.php?perm=228
"Storytelling reveals meaning without committing the error of defining it."
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The problem is most borrowers never learn from their actions.
In the first place it's never a good idea to borrow for a motorbike, for a wedding or for a new iPhone.
In the first place it's never a good idea to borrow for a motorbike, for a wedding or for a new iPhone.
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It's pretty much a copy of this article from August:
https://www.latimes.com/world-nation/st ... n-cambodia
https://www.latimes.com/world-nation/st ... n-cambodia
Romantic Cambodia is dead and gone. It's with McKinley in the grave.
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Why do you blame borrowers first, not lenders? The borrowers often do not know all the rules and sign a paper they don't understand... Or are later pressed to sign over land, which nobody mentioned in the first place...
As for motos, very few Thais or Cambos can afford to buy a moto straight down cash like Westerners... They have no choice but to get a loan of some kind. There is no other way for them to do it... For example, I noticed this is how bike dealers make a whack of money in Thailand: a new bike might cost about, say, 1200 dollars, and people usually put only 50 or 100 dollars down, along with say, 25 or 50 bucks repayment a month; so, the way the dealers have rigged it, by the time they pay off interest and prinicipal, the moto buyer has forked out around 1800, or even 2000 dollars...
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"Storytelling reveals meaning without committing the error of defining it."
...Hannah Arendt
...Hannah Arendt
In the Khmer Rouge period, quite a lot of "intelligence", how to deal with money got wiped out, country wide. All those born after roughly 1970, missed that, since they got so little money, their only option was to spent it right away. And that habit spread through and into the subsequent generations. However, the youngest generation (roughly 18 years by now), with proper education, start to understand, they are far better off, when they first earn and then spent.
That's true but have you ever looked at the Maths on a western mortgage? You'll pay about 3x the purchase price over 25 years.Orichá wrote: ↑Tue Nov 17, 2020 4:49 pmWhy do you blame borrowers first, not lenders? The borrowers often do not know all the rules and sign a paper they don't understand... Or are later pressed to sign over land, which nobody mentioned in the first place...
As for motos, very few Thais or Cambos can afford to buy a moto straight down cash like Westerners... They have no choice but to get a loan of some kind. There is no other way for them to do it... For example, I noticed this is how bike dealers make a whack of money in Thailand: a new bike might cost about, say, 1200 dollars, and people usually put only 50 or 100 dollars down, along with say, 25 or 50 bucks repayment a month; so, the way the dealers have rigged it, by the time they pay off interest and prinicipal, the moto buyer has forked out around 1800, or even 2000 dollars...
The alternative for the peeps here is the parallel economy at 20% per month, or God forbid they fall into the hands of the Chinese money lenders. Then you cant ever pay.
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So did the money lenders. The Chinese immigrants from the 19th century were well known as hoarders of rice (buy in bulk cheap, sell back expensive when the supply dried up) and, of course, usury.
Like all good Marx inspired revolutions, such things were brought to the forefront of already angry peasant thought process.
Loansharking and bad debtors are nothing new, and while we hopefully won't see such and extreme backlash in upcoming times, it's always best to look at what's happened before, and try to plan for a way out of ending up with a displaced, hungry populace.
Robert Nestor Marley:
Them belly full, but we hungry
A hungry mob is an angry mob
A rain a-fall but the dirt, it tough
A pot a-cook but the food no 'nough
You don't seem to understand the maths on a western mortgage. Yes, it's more expensive, though at the end, you own something that is more worth than you in total paid for (including the interest).
And, renting for that period to save from your income doesn't work either.
When you apply that to motobikes, holidays, etc, the value of the object is zero, after you paid off the loan.
Good point, however, the informal lenders have a big risk which is why they may charge an arm and a leg but if you lend to Da and Walt at the Alamo you that's likely to end up in piecesOrichá wrote: ↑Tue Nov 17, 2020 4:02 pmBoth articles barely mention the significant difference between "informal" lenders -- that demand much higher interest rates -- and the legally registered MFIs. Unofficial loan sharks charge 30% and more, and that is what is trapping some of the villagers mentioned in the Bangkok Post article...