AIIB Watch Cases

Status: Approved (but loan agreement not signed yet)
Timeframe: 2022-?
Area: Cambodia
AIIB Investment Amount: US$ 75 million
Total Project Cost: Up to US$ 75 million

E&S Category: FI

Project Details: The project is a non-sovereign backed loan to PRASAC Microfinance Institution Plc. (PRASAC), to support and expand its lending to eligible private-sector micro, small and medium sized enterprises (MSMEs) in Cambodia.

Resettlement: The frequent use of land titles as collateral fomedium-sized in Cambodia, combined with reports of predatory lending and abusive collection practices, has been widely criticized for dispossessing borrowers of their land without the use of legal foreclosure methods and contributing to poverty and involuntary resettlement. Reported abuses include the microloan activities of PRASAC Microfinance Institution Plc., which this AIIB project will be funding.

Organizations monitoring: Equitable Cambodia; Cambodian League for the Promotion and Defense of Human Rights (LICADHO)

AIIB interactions to date: In November 2022, a number of CSOs released a joint statement to ensure that necessary reforms are made to Cambodia’s microfinance sector prior to any new investments, including the return of land titles to borrowers and remuneration for victims of predatory lending and collection practices. In a response statement AIIB representatives acknowledge “systemic issues” in the market and stated that those issues are under “internal review.”

Further information: China.Table Article (German); Cambodia News Today (Chinese); MFICambodia (Khmer, English, German); südostasien (German); AIIB Page

Last update: 31.12.2023