PHNOM PENH -- A recent decision by the National Bank of Cambodia to impose an interest rate cap on loans provided by microfinance lenders has prompted fears that low-income Cambodians, who often depend on small borrowings to stay afloat, will be hit hard.
The central bank on March 14 said microfinance institutions can charge a maximum 18% annual interest rate, compared with 20-30% before. The change took effect immediately and has drawn widespread criticism from industry experts.