Cambodia Arrests 64 in Crackdown on Loan Shark Networks

Cambodian police have arrested 64 individuals, including 24 women, in a sweeping crackdown on illegal microfinance operations charging interest rates as high as 85 percent. The suspects were detained across Prey Veng, Kandal, and Svay Rieng provinces between 3 and 6 October, and have since been sent to Prey Veng Provincial Court to face legal proceedings.

Authorities say the suspects were operating under five unlicensed microfinance groups, offering loans with exorbitant interest and hefty service fees. When borrowers failed to repay, they were allegedly threatened with property seizure.

Major General Chhoeun Bunchhorn, Chief of Prey Veng Provincial Police, confirmed that the arrests followed a two-week investigation prompted by multiple complaints. “These groups were not registered and were using intimidation tactics to exploit vulnerable borrowers,” he said.

Under Cambodia’s Law on Banking and Financial Institutions, moneylenders must be licensed, and the legal maximum interest rate is capped at 18 percent per annum. Legal experts say the arrested groups were flagrantly violating these regulations.

So Dara, a member of the Bar Association, noted that unregulated lending poses serious risks to both individuals and the broader financial system. “Operating without a licence and charging excessive interest undermines legal financial institutions and traps borrowers in cycles of debt,” he said.

The Cambodian Microfinance Association (CMA) welcomed the crackdown. Spokesman Taing Tongngy said illegal lending has long harmed the sector and the public. “These practices involve threats, intimidation, and defamation. We fully support the authorities’ action to protect consumers and restore trust in the financial system,” he stated.

The arrests mark a significant move by Cambodian law enforcement to rein in predatory lending, which has plagued rural communities and low-income borrowers. Officials say further investigations are underway to dismantle remaining networks and prevent future abuse.

As Cambodia’s financial sector continues to grow, regulators and police are under increasing pressure to ensure that lending practices remain fair, transparent, and within the bounds of the law.

-2025-10-08