Financialization and rural development: comparing credit systems in Thailand and Cambodia

ABSTRACT

This article compares rural credit systems in Thailand and Cambodia in order to advance studies on financialization and rural development in South East Asia. In Thailand, the state remains a large provider of credit to farmers. In Cambodia, most farmers access credit from a globalized, private microfinance industry. Based on qualitative research carried out in 2021 and 2022, we argue that farmer debt has led to divergent outcomes in Thailand and Cambodia due to their opposing systems of rural credit developed over the past half-century. These systems were forged within historically specific conjunctures of international development policies, state–capital relations and domestic politics of debt. Consequently, Thailand’s farmers access credit from the state at significantly lower costs and with more support in various forms. Over-indebtedness is a problem for some farmers, but not because state-controlled financial institutions charge excessive interest rates. In contrast, the cost of private credit is higher in Cambodia, with many farmers facing over-indebtedness with little to no support from the government. This article contributes to scholarship on financialization within South East Asia by demonstrating how the legacies and geopolitics of development, alongside the contentious politics of farmer debt, together shape the outcomes of rural credit systems.

KEYWORDS:

• Financialization
• rural development
• agricultural credit
• indebtedness
• Thailand
• Cambodia

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The term farm debt refers to any debt held by a household whose livelihood is connected to agriculture. Though farmers often take on debt to pay for agriculture, their debt may also be related to other expenses like business, healthcare or education (see Green 2022).

Additional information

Funding

This research was funded by two grants. The authors both received support from the NASA Land-Cover and Land-Use Change Program of the Earth Sciences Division, grant number 80NSSC18K0287. Jefferson Fox, from the East–West Center in Honolulu, Hawai‘i, was the Principle Investigator for the NASA-funded project. The first author was also supported by his faculty start-up grant at the National University of Singapore, grant number A-0003620-00-00.