Six detained for protesting microfinance repayments5 min read

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A group of youth activists protest in front of two microfinance institution branches in Battambang City on Saturday. Kim Seng
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Six people were detained by the Battambang provincial police last week after protesting outside microfinance institution (MFI) branches that they accused of failing to heed requests for loan repayment holidays amid Covid-19.

Hun Vannak, an activist who was previously jailed for five months for filming illegal sand-dredging activities off Cambodia’s coast for the environmental group Mother Nature, said that the six were among 16 activists stopped by police after live-streaming their protest march on Facebook on Saturdaynight.

He said the activists, from the Khmer Thavrak Group, had held the peaceful protest to call on MFIs and banks in Battambang province to suspend all loan repayments until Covid-19-related economic damage begins to abate.

“We want the banks and MFIs to implement the government’s measures on loan repayment suspension for poor people and for workers who have lost their work and are unable to pay the MFIs and banks,” Vanna said. “The police arrested us, brought us to provincial police headquarters and asked us questions for several hours about why we live-streamed a video along the road in Battambang.”

Vannak said that after the questioning, police officers had attempted to force them to thumb print a contract promising not to hold such a protest again. But he said they maintained they did nothing wrong and were eventually released.

“They had the intention to scare us and to ban us from doing these activities, and this was a threat against our spirit,” Vannak said, explaining that he thought there would be many more such protests in the future as the issue grew worse.

“If the situation with Covid-19 continues into the future, the case of indebtedness with banks and MFIs will also continue into the future, and people will suffer their pressure and not be happy, so they will criticize this more and more,” he said.

Another activist with the group, the 31-year-old Eng Malay, said that she had borrowed money while working in the kitchen of a Chinese restaurant in Phnom Penh but had lost her job after a fall in customers due to Covid-19 fears.

She said she joined the protest — and was also undertaking a hunger strike — because she feared losing her family home after putting it down as collateral.

“I borrowed $2,000 from a bank at the end of 2018 and I have to pay more than $70 a month for three years but now I do not have the money to pay back the bank because I lost my work,” Malay said. “I want the bank to suspend my loan repayments for three months or six months, based on the easing of Covid-19.”

“We are concerned that the bank will confiscate our land and our cottage in O’Raing Ov district in Tboung Khmum province at any time now because we do not have enough money to pay back the bank,” she said.

Heng Sayhong, a coordinator for rights group Licadho in Battambang, said he thought the police’s heavy-handed approach had missed the mark and said the government should be listening to the issues raised by the detained group.

“The authorities should intervene and pay attention to this by working with the banks and MFIs to help the people who do not have enough money to pay [their loan repayments] because they do not have any income,” Sayhong said. 

“The government should strengthen its measures and be clear with the banks and MFIs to make things easier for those suffering amid this Covid-19 disease.”

The government has called on MFIs and banks to help borrowers impacted by the coronavirus crisis to restructure and delay loan repayments. However, some, including Licadho, have publicly called on authorities to take a more hands-on approach and announce mandatory repayment holidays until the crisis is over.

But not everyone is convinced such drastic measures are yet necessary.

Say Sony, the executive vice-president and chief marketing officer for PRASAC, one of Cambodia’s largest MFIs, said any customers who had requested delays to their repayment plans at his institution had been granted their requests.

He said customers working in the economic sectors most impacted by Covid-19 disease outbreak had even been prioritized for repayment suspensions.

“We have favored four sectors, including tourism, garment, construction, and transportation for loan repayment suspending,” Sony said. He said any of the protestors could have instead gone inside an MFI branch to ask for a delay.

“They can go to discuss with the institution to find a solution — to find a win-win policy,” he said. “We thank all the customers that continue to pay our institution.”

Separately, the Garment Manufacturers Association in Cambodia (GMAC) on Fridayissued a letter calling on owners of buildings where garment workers reside to lower rents by at least 30 percent for up to six months to help ease the burden on those who have been suspended from work due to Covid-19.

GMAC said 180 factories have suspended production and another 60 were expected to do so soon — impacting some 200,000 of the country’s 800,000 workers. A 30-percent rental decrease could help keep many workers afloat while the industry awaits a return to normal orders, GMAC’s letter said.

“This reduction will help lower the financial burden of factories and contribute to the economic recovery in Cambodia to support the sector,” it said, calling for a collective approach. “We look forward to seeing further understanding and collaboration in order to restore and promote economic growth in Cambodia.”

However, GMAC secretary-general Ken Loo said a recovery was not assured.

“We do not know whether we will receive a good result or not,” Loo said. 

“We do not have buyers ordering production because global markets are closed. If this continues, some factories could be reaching toward closure because we do not know where we can make the money to provide for the workers’ salaries.”

In the meantime, some are calling for more urgent and direct state-led support.

Pav Sina, president of the Collective Union of Movement of Workers (CUMW), said garment workers whose factories had “suspended” production at least were receiving a $70 government-supported stipend until they got work back.

But he noted there were many who had already lost their jobs due to closures. 

“Workers who had their contracts finished by factory owners are meeting more difficulties than the ‘suspended’ workers, because they have not received any benefits and now they cannot find any work,” Sina said. “I think the government should consider a budget to provide [funds] to people in all affected sectors.”

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