Jeopardizing land ownership . . .
Last month, the watchdog of the World Bank’s private lending arm announced that it would review complaints about micro-lending practices in Cambodia that violate laws designed to protect the country’s Indigenous communities. Indigenous communities in rural Cambodia are the most affected by Cambodia’s microfinance debt crisis. For example, in Kres village in the country’s northeast, more than 70 per cent of residents are in debt to micro-lenders offering their services purportedly to aid in developing the communities. Most loans use land titles issued by local authorities, which illegally confer individual ownership over lands held collectively by an Indigenous group or part of a nationally protected territory. According to Indigenous advocates, some 14 Indigenous communities in Cambodia face similar challenges.
Servicing debt, not community needs . . .
Indigenous communities in Cambodia often subsist on farming and traditional practices such as gathering from surrounding forests. Private resource extraction companies have slowly encroached on Indigenous lands since 1990 as Cambodia transitioned to a market economy. A landmark 2001 land law recognized Indigenous peoples and gave them special protections, including the right for communities to participate in collective land titles (CLTs) that provide shared ownership to villagers. Despite the demanding bureaucratic process, some 455 Indigenous communities hold CLTs and consider them a powerful tool to protect their lands. Nonetheless, residents of the often-isolated rural communities face a difficult choice between staying within the CLTs or leaving them to leverage their individual holdings to gain credit for economic development. However, over-indebtedness has prompted many villagers to sell their lands or become day labourers to make their loan repayments.
Road to dispossession paved with good intentions . . .
Many microfinance institutions offer their services in Indigenous communities as tools for residents to reduce poverty, improve farming capacities, or invest in education for youth. Given their development mission, many have international investors – including the World Bank and development agencies from the EU, Norway, Sweden, and the U.S. However, the microfinance institutions not only accept land titles that overlap with collective and protected lands but also harass residents when they fall behind in payments. According to Kres residents, lenders encouraged locals to sell land to community outsiders (or companies) to repay loans. Families also often took on extra loans to repay the original ones. The investigation by the World Bank’s independent watchdog is ongoing.
- Bloomberg: World Bank reviews alleged abuses by Cambodian microlenders
- Cambodian League for the Promotion and Defense of Human Rights: Right to Relief: Indebted land communities speak out
- Southeast Asia Globe: Land loss and debt: the bottom line for misleading microloans