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Cambodia's "reckless" microfinance industry puts economy at risk

Rights group claims lending practices amount to human rights abuses

Chan Veang holds one of her microfinance loan agreements, which she says she cannot read. (Photo by Shaun Turton, edited by Nikkei)

SIEM REAP -- Cambodia's $8 billion microfinance industry, touted by Western aid groups and foreign investors as bringing financial opportunities to the country's poor, is ensnaring families in crushing debt and could threaten the country's economy, according to a damning report released Tuesday. 

According to Cambodian rights groups Licadho and Sahmakum Teang Tnaut, reckless lending in the fast-growing sector -- which counts 2.4 million Cambodians as clients -- has led to coerced land sales, debt-driven migration, child labor and farmers eating less food.

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