Interest Cap Poses Body Blow for Cambodian Microfinance

Just months ahead of local elections, the Cambodian government has ordered the microfinance industry to cap the interest rate on new loans at 18 percent a year. While borrowers will applaud that at least in the short term the decision has rocked the industry, which fears some firms will go bankrupt. The end result could be fewer small loans for villagers, who will be driven into the hands of predatory lenders. For VOA, Robert Carmichael has the story from Phnom Penh.