2019 Fiscal Year Research-status Report
Research on the Factors Driving Financial Over-Indebtedness and the Impacts of the Interest Rate Ceiling on the Microfinance Sector: The Cambodian Case and International Comparison Analysis
| Project/Area Number |
18K01604
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| Research Institution | Saitama University |
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Principal Investigator |
サムレト ソワンルン 埼玉大学, 人文社会科学研究科, 准教授 (90614371)
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| Project Period (FY) |
2018-04-01 – 2022-03-31
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| Keywords | Interest rate ceiling / Microfinance / Debt burden / Cambodia |
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| Outline of Annual Research Achievements |
During FY2019, by collaborating with Credit Bureau Cambodia (CBC), Cambodia Microfinance Association (CMA), and JICA Ogata Research Institute, a survey on livelihoods and access to the finances of 1,000 households was conducted between August 19, 2019 and September 20, 2019. The survey covered 36 communes selected from five Cambodian provinces. The preliminary results from this household survey indicate that the microfinance interest rate decreased after the imposition of the ceiling. For the average loan size, its increase has generally been observed. Factors affecting the interest rate before and after the ceiling were also examined. The results show that, at a lower interest rate, higher activities of microfinance-related institutions are associated with a lower interest rate. This may indicate that competition among lending institutions for a lower interest rate loan has increased. An analysis of households’ debt service burden was also conducted. The results show that higher financial literacy is possibly associated with the lower debt burden. These preliminary results are being revised using additional data provided by CBC and CMA.
Furthermore, as an examination of an essential issue in the financial sector, research on the effects of the dollarization on Cambodia’s trade balances was also implemented. The research outcome was presented at an international conference and was published as a policy research working paper. In enhancing collaborative research activities, a study on the effects of the oilfield discoveries on government behavior was also conducted.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
For FY2019, the research plan includes a survey on livelihood and access to the finances of randomly selected households, an examination of the impacts of the imposition of interest rate ceiling and an analysis of households’ (i.e., borrowers’) debt burden. As described in “Summary of Research Achievements,” this was accomplished as planned. Other collaborative research activities were also implemented during FY2019.
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| Strategy for Future Research Activity |
During FY2020, the overall effects of the imposition of interest rate ceiling on the microfinance sector and financial inclusion will be examined from both the lender and borrower sides using the data collected from the household survey in FY2019 and the existing data from Credit Bureau Cambodia, Cambodia Development Resource Institute, and Cambodia Microfinance Association. Further collaborative research with JICA Ogata Research Institute will be conducted.
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| Causes of Carryover |
The costs for the household survey and collecting data and information during FY2019 could be partially saved by to the collaboration with JICA Ogata Research Institute. During FY2020, a seminar for disseminating the research outcome may be organized. The amount incurred from FY2019 will be used for partially covering the costs for that plan and for research travels for academic conferences and further data collection.
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