More than 100 NGOs called on Cambodia’s government Tuesday to direct microfinance institutions (MFI) and lenders to suspend all loan repayments and interest accrual for at least three months to allow borrowers the ability to shelter at home during the country’s latest and deadliest coronavirus outbreak.
Cambodia, which had largely remained unscathed by the coronavirus, registered its first death from COVID-19—the disease caused by the virus—last month, a year to the day that that the World Health Organization labeled it a pandemic. Since then, 22 people have died, and more than 2,800 people have tested positive.
In a statement, the NGOs noted that borrowers are unable to avoid potential exposure to the coronavirus because they fear losing their land or homes if they cannot repay their debt.
They said that the garment, tourism, entertainment and construction sectors have been particularly hard hit by the pandemic—sectors that employ hundreds of thousands of women, who hold 75 percent of microfinance loans in Cambodia. However, farmers, migrant workers, poor communities, informal workers, traders, small businesspeople and street vendors “have also seen incomes plummet,” according to the statement, meaning that “very few people have been spared” amid the economic downturn.
“The government has already taken measures to ease some of the suffering caused by more than a year of economic turmoil,” the NGOs said, including cash transfers to the poor and subsidies to garment workers.
“But the government did not take similarly swift action to offer relief to microfinance borrowers. The government’s request last year for MFIs and banks to implement relief for only certain sectors, without clear guidelines for which borrower qualifies or what type of relief to offer, effectively allowed the financial sector to set its own rules for restructuring loans.”
The NGOs said that as a result, banks and MFIs are suspending principal payments, but continue to collect and calculate interest on the loans.
“This has resulted in record profits for some microloan providers as household incomes continue to fall as a result of the … pandemic, and larger debt burdens for borrowers after their restructuring ends. This is not real relief.”
Amid the latest outbreak, the NGOs called for “widely implemented relief,” saying that incomplete restructuring for around 10 percent of microloans “is nowhere near enough to deal with the scale of this crisis.”
“We are asking the government to help millions of people by ordering the profitable financial sector to help carry some of the economic burden,” they said.
“Borrowers are losing their land, foregoing medical care, and risking their health and safety during the pandemic to repay these debts. A three-month suspension, with the possibility of further extension, will help borrowers’ stay home, stay safe, and improve the overall situation in the country.”
Call for comprehensive policy
Ny Sokha, with the local rights group Adhoc, told RFA’s Khmer Service that the government should come up with a policy to assist those in need during the pandemic.
“This request is being made during this particularly challenging situation due to curfews and quarantines,” he said. “It is seriously affecting the living standards of the people.”
Government spokesman Phay Siphan told RFA that the NGOs’ requests are impossible to honor because “Cambodia is a free economic market.”
He said debtors and creditors need to determine a path forward between themselves.
“The people can’t rely on the government because when they didn’t consult with us when they took the loans,” he said. “They need to be responsible for their own fates.”
Cambodia Microfinance Association (CMA) spokesman Kaing Tongngy told RFA that CMA members are also affected by the pandemic, which has left them facing high operational costs and a steep decline in revenue.
“We consider our clients long-time customers, so when they have financial problems, we will gather our resources to help them as much as we can, even if that means we lose revenue,” he said.
“However, we cannot help them on a largescale because we are having problems on our end.”
The call from NGOs came as Cambodia’s Prime Minister Hun Sen issued an order “prohibit[ing] villagers from temporarily traveling from one province to another for the 14 days between April 7 and April 20 to prevent the spread of the coronavirus,” as well as the closure of all tourist destinations. The lockdown does provide for certain exceptions for essential travel.
Hun Sen also ordered the Ministry of Health to prepare COVID-19 patients with “mild symptoms” to receive treatment at home, due to a rise in local transmissions. He said Cambodia will adapt U.S. and European measures in treating COVID-19 patients when hospitals cannot accommodate them due to a lack of beds.
“We cannot accommodate all patients when fewer patients recover then those who are getting sick,” he said.
“In this situation, we won’t have enough [room in] hospitals, so the solution is to keep people with mild symptoms treated at home.”
But even as the government introduced new measures to stem the spread of the virus, it faced criticism Tuesday from New York-based Human Rights Watch (HRW) for its prior policies that the group said constituted an assault on people’s right to privacy and other human rights.
In a statement, HRW said that the government’s “Stop COVID-19” QR Code system, implemented on Feb. 20 by the Ministry of Post and Telecommunications and Ministry of Health to assist with contact tracing of new COVID-19 cases is too intrusive and urged the ministries to explain how collected data is used, who has access to it and for what purpose, how the data is secured, and how long it is stored.
“Cambodia’s QR Code system is ripe for rights abuses because it lacks privacy protections for personal data,” said Phil Robertson, deputy Asia director at HRW.
“These concerns are heightened by the government’s stepped-up online surveillance of Cambodians since the outset of the pandemic, putting government critics and activists at greater risk.”
The Post and Telecommunications Ministry and other relevant ministries did not respond to queries about how the system works when contacted by HRW in mid-March, the group said.
Privacy at risk
According to the Post and Telecommunications Ministry’s Facebook page, the system is “voluntary,” but “participation is strongly encouraged.” When users scan a QR code as they enter an establishment, they receive a six-digit code to their cellphone via text message, which they need to enter into their phone. Some 155,000 institutions have registered to use the system and several provincial authorities are using it at provincial border crossing-points as part of mandatory screening for COVID-19 symptoms.
Health Minister Mam Bunheng has said that the QR Code system is used to record the movements of people at registered locations without violating thier privacy, but the Post and Telecommunications Ministry later said that the system would provide the government with information about the user’s location, allowing the authorities identify the user and whether they were violating two-week quarantine requirements.
“Creating a log of people’s locations reveals sensitive insights about their identity, location, behavior, associations, and activities that infringe on the right to privacy, adding to the government’s existing intrusive surveillance practices,” HRW said.
“Cambodia should enact a data protection law that would regulate and protect the usage, collection, and retention of data in accordance with international standards for privacy and other rights.”
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