Cambodia: Two NGOs file complaint against 6 banks and micro-finance institutions alleging them of human rights violations
"IFC Watchdog Accepts Complaint over Microfinance Abuses in Cambodia", 3 May 2022
The Compliance Advisor Ombudsman of the International Finance Corporation (IFC) has accepted and will move ahead with its review of a complaint alleging human rights violations and violations of IFC performance standards committed by six microfinance institutions and banks that offer microloans in Cambodia.
The complaint … details how the IFC failed in its obligation to conduct due diligence and supervise projects to ensure compliance with performance standards. As a result, grave harms resulted from IFC loans and investments in six microfinance institutions (MFIs) and microloan-providing banks in Cambodia – ACLEDA, Hattha Bank, Sathapana, Amret, LOLC, and Prasac – who together hold about 75% of the country’s microloans.
These six institutions combined have received approval for more than $400 million in IFC funding over the last five years, including direct loans, syndicated loans, equity investments and loans from IFC-backed funds. The complainants are calling for the IFC’s Compliance Advisor Ombudsman (CAO) to launch a swift, independent investigation into the harms caused by these investments…
The IFC’s reckless investments and lack of due diligence regarding its microfinance projects have destroyed lives and wrecked communities across Cambodia, and they must take steps to offer real relief to these borrowers
“These complainants are taking a risk to share their experiences in order to expose the harms and abuses perpetrated by MFIs and banks in Cambodia,” said Pilorge Naly, outreach director of LICADHO. “The IFC’s reckless investments and lack of due diligence regarding its microfinance projects have destroyed lives and wrecked communities across Cambodia, and they must take steps to offer real relief to these borrowers.”…