The National Bank of Cambodia (NBC) said on Thursday they have joined forces with police to take legal action against those involved in fraudulent online lending saying it is a crime, and urged the public to contact official financial institutions when borrowing money.
“NBC will take legal action against illegal lending, delivering services online, social media, and posters to the public,” the NBC said in a Facebook page post along with a news release.
“The National Bank of Cambodia has observed that some bad individuals have openly advertised to provide loans to people through various forms such as online, social media, leaflets, and postings in public places,” the news release said.
NBC said these companies or individuals do not have license to operate and have violated the law on banking and financial institutions.
NBC urged the public to be extremely careful and encouraged the use of official services only.
“The National Bank of Cambodia condemns illegal advertisements of informal lending in all forms,” the NBC said.
“At the same time, the National Bank of Cambodia is cooperating with involved competent authorities to take legal actions against companies or individuals committing illegal acts according to existing laws,” the NBC added.
The NBC’s move comes after a report by rights Licadho in early August that detailed allegations by three Cambodian women who had been harassed by informal online lenders after borrowing $50. They became victims of blackmail and extortion after sending naked photographs and videos in an attempt to escape the cycle of debt.
Licadho said one woman, who faced extensive harassment, even made payments exceeding double the sum she received. This failed to resolve the situation. She borrowed $1,000 from a group identified as Loanly, received less than $600 after undefined fees, and then paid the group almost $1,400. Still the harassment continued.
Ath Sam Ath, director of Licadho, said on Friday that the government has to implement laws to crack down on illegal loans, particularly online loans, with high-interest rates and illegal offenses.
"Currently, a lot of illegal loans, especially online loans, with unregulated, high-interest rates and illegal offenses, the government has to take action and implement the law to crack down on criminals to protect victims,” Sam Ath told Kiripost.
He added that the issuance of a warning letter is one thing, but it is important to enforce the law. If the loan is illegal, there must be an investigation to find out the crime and the perpetrators must be arrested and brought to justice.
The government institution has the highest responsibility to check and research illegal loans, especially online loans, and enforce the law, Sam Ath said.
He added, “Citizens must consider loans that allow us to do something immoral. It's a violation of rights that should be considered and [citizens] must complain to authorities and come forward to get justice and help prevent it.”