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Remittances Pull Farmers Deeper Into Debt, Research Finds

The study found that families receiving remittances saw an average increase in debt of 6 percent.
WASHINGTON DC —  Remittances sent home by Cambodian migrant workers result in their families falling deeper into debt as they become more prone to borrowing, a study has found.

The report, “The Cambodia Debt Trap? A Study of the Relationship Between Remittance and Household Debt”, published in January by the Future Forum think tank, found that households that received more remittance payments tended to rely more heavily on loans from banks, microfinance institutions, and private lenders.

“The situation of remittances and debt in the Cambodian context in the short run can be viewed positively as it helps migrant families ensure their living requirements [are met], such as food, transport, and accommodation,” wrote Lor Samnang, the lead researcher.

But in the long term, Samnang found that families become over-indebted as loans are used to finance unprofitable ventures.

The study found that families receiving remittances saw an average increase in debt of 6 percent.
Continue read article at: https://www.voacambodia.com

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