As dark clouds approached her village in northwestern Cambodia one afternoon in July, Set Sreylon prepared for the monsoon that threatened to flood her new family home. While the rains were a concern, the 37-year-old feared a bigger threat to her property – the daily visits from debt collectors demanding repayments on her microfinance loan and ensuing credit she had taken out to keep up with the repayments. With the coronavirus pandemic ending Sreylon and her husband’s jobs in the tourism industry, the mother-of-two was at a loss as to how she would keep the lenders at bay, and clear a growing debt secured by the title to her family’s land. Her debt – originally a single loan from a microfinance institution (MFI) – had almost doubled in a year to $8,000 and was pursued by various loan sharks charging up to 40% interest. “You borrow from A to pay B, then you borrow from B to pay C,” she said outside her home in Pouk district, a few miles from Cambodia’s Angkor temples and the tourism hotspot of Siem Reap.“What’s the end result? You run out of letters and you have to sell your land,” Sreylon told the Thomson Reuters Foundation. Microfinance was pioneered in the 1970s by Nobel laureate Muhammad Yunus to give low interest credit to poor or rural people to set up businesses but the fast-growing sector has been invaded by predatory lenders who can strip people of everything.Dozens of interviews with indebted villagers, charity staff, economists, lenders and officials revealed how the coronavirus fallout has compounded microfinance debts, with fears growing that countless Cambodians could end up destitute and homeless. “The Cambodian microfinance sector was already headed for a meltdown,” said Milford Bateman, a visiting professor of economics at Juraj Dobrila University of Pula in Croatia, and one of the world’s leading academics and authors on the issue. “COVID-19 has accelerated a slow-moving disaster for the poor as they are gradually stripped of their land,” he added.POVERTY TO PROFIT Sreylon is far from alone. She holds one of 2.7 million microloans in a country of 3.3 million households, where the average debt per borrower is the world’s highest at $3,800 – more than twice Cambodia’s gross domestic product per capita.Since the Southeast Asian nation emerged from decades of war in the 1990s, microfinance has evolved into a $10 billion sector profiting international financial institutions. The model has been credited with helping drag millions out of poverty by funding farming equipment or small businesses, but activists and academics said it has driven a rising number of borrowers to sell land, migrate or put their children to work.