Today (June 30, 2025), the KTNC Watch released a report titled “Preying on Poverty: An Investigation into the Lending Practices of Korean Banks in Cambodia and their Human Rights Impact,” which details the predatory lending practices of Korean banks operating in Cambodia, resulting human rights violations against local residents.
The report analyzes KB Kookmin Bank and Woori Bank’s “microfinance” operations targeting the rural poor in Cambodia, evaluating them against international standards on the corporate responsibility to respect human rights and responsible business conduct. Through on-site interviews with affected families, the report conveys the voices of borrowers whose testimonies show how such lending practices impacted the human rights of socially and economically vulnerable rural households in Cambodia.
The investigation revealed that the loan operations of KB Kookmin Bank and Woori Bank in Cambodia exhibited typical characteristics of predatory lending. Credit officers engaged in aggressive sales practices and approved large loans to poor rural households using their land as collateral, knowing repayment would be difficult based on their regular household income. When debts accumulated, credit officers coerced borrowers into selling their collateral land or taking out high-interest private loans to repay the debt through aggressive debt collection practices.
Through this business, the two banks generated annual interest income exceeding hundreds of billions of won, while this led to the economic ruin of affected families, exacerbating poverty and violating their basic human rights. This went beyond mere economic loss, causing harm that threatened the survival of the families, including loss of land and housing, food shortages, deteriorating health, interruption of children's education, child labor, depression, and suicide.
For years, major international media outlets and the UN Human Rights Council have reported on the problematic lending practices of the Cambodian microfinance industry. Last October, this issue was first reported in Korean domestic media and also raised during a parliamentary audit session by MP Kim Nam-geun. However, the two banks continue to claim that there are no issues with their lending operations in Cambodia and have made no efforts to improve.
“It's deplorable for Korean banks to be preying on so many Cambodian borrowers, driving an over-indebtedness crisis as Cambodians across the country drown in debts, “ said Naly Pilorge, outreach director of LICADHO. “KB and Woori need to act to put an end to these abuses in their Cambodian subsidiaries, and provide debt relief for borrowers who have already been harmed, especially in Indigenous communities.”
With this report, KTNC Watch urges responsible response from KB and Woori Bank and will continue efforts to secure the rights of borrowers affected by the banks' predatory lending practices.