The Imperatives of Debt: Microfinance and Land Dispossession in Cambodia

• In Event: 3146 - Regular Session on Rural Sociology

Abstract

In recent years, international banks, investment agencies, and development institutions have created new markets for financial accumulation by rapidly expanding the commercial microfinance industry in the Global South. Microfinance has shifted from its pro-poor focus to become a site of financial accumulation by dispossession. In Cambodia, which has one of the largest microfinance industries in the world, the typical loan now exceeds average household income and requires land-based collateral. Cambodian borrowers are increasingly experiencing problems of over-indebtedness, compelling families to reduce food consumption, take out new loans to service prior debts, migrate, and sell their land in distress. In this paper, we investigate this last effect of over-indebtedness, distress-land sales, as an everyday form of dispossession. We argue that the coercive power of microfinance debt—constituted by collateralized legal contracts, discourses of moral responsibility, and public shame—is driving land dispossession amongst the country’s most vulnerable people. To make our argument, we draw upon ethnographic fieldwork, as well as quantitative data from the Cambodia Socio-Economic Survey, MIX Market, and two industry-sponsored large-scale quantitative surveys of over-indebtedness. We trace the rise of the commercial microfinance industry, show how it has caused over-indebtedness, and how household debts can lead to distress land sales. These land sales have largely gone unacknowledged within the industry because they take place through informal channels rather than the court system. We conclude that microfinance debt-induced land dispossession is a product of an overly commercialized international microfinance industry that now values profits over people.

Authors

• W. Nathan Green, University of Wisconsin at Madison

• Maryann Bylander, Lewis & Clark College