Working Papers 79
The Role of Rural Credit during the Global Financial Crisis: Evidence From Nine Villages in Cambodia
This paper studies the role of rural credit in Cambodia during the global financial and economic crisis that began in 2008. The paper briefly reviews rural credit in Cambodia during 2008, analyses rural households’ formal and informal credit demand during the crisis and proposes policy options. The results suggest that household demand for credit increased during the crisis. The demand for formal loans was higher than for informal ones, indicating the important role of the formal rural credit market in times of economic downturn. There is no evidence of a positive relationship between the crisis and loans to smooth consumption; instead loans were used for farming investment and debt repayment.