The National Bank of Cambodia (NBC) and the General Commissariat of National Police on Thursday released a joint statement announcing strict legal actions against illegal online advertisements to provide loans.
The statement said that recently authorities have observed the activities of promoting and providing informal financial services, especially credit services, through mobile phones, social media and online anarchically without the proper permission from the NBC and this is causing confusion.
“It has caused many economic and social consequences through excessive interest rates, threats, unfair contract practices, embedding excessive profits from borrowers, causing harm to people's livelihoods and causing falling into excessive debt,” they said in the joint statement.
The statement called on citizens to use official financial services provided by banking and financial institutions with licenses to conduct business from the NBC.
These institutions are subject to the laws, regulations and supervision of the NBC and their clients are protected by laws, the statement said.
It added that citizens are urged to refrain from borrowing money from informal financial service providers.
Soeung Sen Karuna, a spokesman at rights group Adhoc, said illegal lending has affected people and some have taken high interest rate loans and had properties confiscated.
“It's a bad picture. In this regard, I understand that the ministries and authorities should have taken such measures a long time ago,” Karuna told Kiripost.
Karuna said authorities should also look at money flowing into the country, saying it is an opportunity for people to launder their money, and some via giving out as loans.
Cambodia has already been placed on the gray list by an international anti money laundering watchdog. Karuna said measures by authorities are something he wants to see.
“This is something we want to see because we do not want to have any problems, like being on the gray list. Today, we are in the list of gray, we do not know whether it will be black or still gray. If there is a good measure by the relevant institutions, this problem can be alleviated, but, on the contrary, by not properly implementing [measures], it will be worse,” Karuna said.