A recent study of microfinance borrowers in Cambodia has revealed that 22% of clients were insolvent or over-indebted.

In real terms, this meant they were either unable to pay back their debts or were making sacrifices to their quality of life to make loan repayments.

Common sacrifices made in order to pay back debts include:

• reducing the quality and quantity of food consumed

• sending a family member to find work outside of your village

• depleting savings

• taking out a new loan to pay existing debts

Have you or has anyone you know done any of the above? If so, it may be time to reassess whether you should take out a loan.

For more information on the relationship between microfinance and over indebtedness please click the link.