The governor of Cambodia’s central bank has sent a letter to the National Police seeking legal action against more than 20 firms that are allegedly offering illegal loans.
The letter, signed by National Bank of Cambodia (NBC) governor Chea Chanto on July 3, and obtained by The Post on Monday, included an attached list of 20 firms and their phone numbers.
The document claimed that all 20 were operating outside state regulations and threatening financial stability.
“To protect the interest of the people and to stop the operation of illegal companies, the NBC requests the National Police commissioner to take strict legal action against the [mentioned] lenders that are neither registered nor [in the process of] obtaining a licence from the NBC,” the letter reads.
According to the letter, the unlicensed lending companies are publicising and actively promoting easy credit services through Facebook, text messaging and the distribution of business cards.
The lenders offer simple loans that don’t require collateral but often fail to disclose interest rates or added fees.
National Police spokesman Kiet Chantharith confirmed on Monday that it had received the letter from the central bank and has appointed a team to work permanently with NBC officials to deal with the matter.
“The NBC has collected enough information, and we have prepared a team to take action against the illegal lenders,” Chantharith said.
Cambodia Microfinance Association (CMA) executive director Yun Sovanna said on Monday that the NBC action aims to protect the rights and interests of clients.
“We hope that the enforcement is effective and unlicensed operators face the law,” he said, adding that the NBC and CMA recently released guides for people who are unsure about loan providers.
“People should only utilise [services] from licensed operators which also offer proper channels to address concern or complaints,” Sovanna said.
Emerging Markets Consulting (EMC) senior consultant Ngeth Chou said on Monday that he welcomed the NBC’s move as it showed its responsibility towards the financial sector.
“It is the right action at the right time to prevent an issue that can threaten the stability of the country’s financial industry,” he said, adding: “We hope the enforcement will be efficient and can solve the matter.”