Microcredit has been a key component of Cambodia’s post-war reconstruction and rehabilitation. Proponents of microcredit argue that microfinance institutions (MFIs) enable rural populations to access financial services that would otherwise be unavailable. Critics of the system accuse MFIs of charging above-market interest rates and implementing profit-oriented repayment policies. A team of local PEP researchers set out to investigate the impact of microcredit borrowing on wellbeing in Cambodia. The research team’s findings indicate that access to credit significantly improves wellbeing outcomes for borrowing households in comparison with non-borrowing households.
Find out more about the research methods, findings and policy recommendations in the following PEP publications: