Logo of Phnom Penh Post newspaper Phnom Penh Post - MFI group warns about shady Facebook adverts

MFI group warns about shady Facebook adverts

MFI group warns about shady Facebook adverts

A representative of the Cambodia Microfinance Association (CMA) yesterday warned the public on the dangers of taking cash loans from unfamiliar institutions, noting that shady lenders were boosting their advertisements.

Yun Sovanna, executive director of the CMA, said Sunday that so-called easy cash loans are becoming increasing noticeable on Facebook. He noted that citizens should examine critically any offers they see advertised on the social network as the lenders may or may not be licensed with the central bank.

“It could seriously impact society and the country’s economy if more people are in debt with unregulated lenders,” he said, adding that if such services are allowed to continue operating, more people could be harmed and eventually the entire sector’s reputation would be negatively affected.

Advertisements for easy cash loans have been growing more prevalent recently on social media as well as adorning placards on the backs of tuk-tuks. Often these services will offer loans without the need for collateral but will fail to reveal the true interest rate.

Chea Serey, director-general of the National Bank of Cambodia (NBC), said on Sunday that NBC is aware of the issue and has made many statements warning the public about predatory lending practices.

“We welcome the CMA’s announcement reinforcing our stance and hope that it can promote better education and awareness programs to the public,” she said. “On the NBC side, we are cooperating closely with relevant enforcement agencies to crack down on this practice.”

However, Ngeth Chou, senior consultant at Emerging Markets Consulting (EMC), said yesterday that the loans offered by unlicensed institutions are very risky and that the NBC should take serious action rather than just make announcements to control the issue.

“Our people still have low financial knowledge, which means we need financial regulators to work actively to protect the public,” he said. “We only regulate those who have licences by taking action such as putting a cap on interests. But if we allow the unlicensed operators to offer the same service, it is unfair to formal institutions. It discourages operators to join the formal sector.”

In August last year, the central bank fined an unnamed microfinance institution $100,000 for engaging in non-transparent lending practices.

Around the same time the central bank launched a dedicated hotline for customers to report any grievances concerning the lending practices of banks or MFIs.

MOST VIEWED

  • Ice cream, noodles flagged over carcinogen

    The General Department of Customs and Excise of Cambodia (GDCE) has identified three types of instant noodles and ice cream trademarks originating from Thailand, Vietnam and France that are suspected to contain ethylene oxide, which poses a cancer risk to consumers. The general department has

  • Exclusive interview with Josep Borrell Fontelles, High Representative of the EU

    CAMBODIA is hosting the 55th ASEAN Foreign Ministers’ Meeting (AMM) and Related Meetings this week with top officials from the US, China, and Russia and other countries in the region slated to attend and to meet with face-to-face with their counterparts on the sidelines. In

  • Rise in Thai air routes to Siem Reap fuels travel hopes

    Local tourism industry players are eager for regional airline Bangkok Airways Pcl’s resumption of direct flight services between the Thai capital and Siem Reap town on August 1 – home of Cambodia’s awe-inspiring Angkor Archaeological Park – which is expected to boost the growth rate of

  • ASEAN Foreign Ministers’ meet commences, Taiwan issue possibly on table

    The 55th ASEAN Foreign Ministers’ Meeting (AMM) and related meetings hosted by Cambodia kicks off in Phnom Penh on August 3, with progress, challenges, and the way forward for the ASEAN Community-building on the table. Issues on Taiwan, sparked by the visit of US House Speaker

  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Recap of this year’s ASEAN FM meet and look ahead

    This year’s edition of the ASEAN Foreign Ministers’ Meeting (AMM) hosted by Cambodia comes against the backdrop of heightened global tensions and increasing rivalry between major powers that have been compared to the animosity of the Cold War era. The following is The Post’