Rising household debt in Cambodia: effects of agricultural land prices and registration

Purpose This study investigates the factors behind the rapid increase in household debt to financial institutions in Cambodia during the 2010s, focusing on the roles of agricultural land prices, land registration and financial institutions’ lending behavior. Design/methodology/approach Econometric analyses are conducted using household-level data from the Cambodia Socio-Economic Survey to examine how changes in land prices and land registration influenced household borrowing, while also considering shifts in financial institutions’ lending stance. Findings The results suggest that rising agricultural land prices significantly contributed to the increase in household debt in the late 2010s by enhancing the collateral value of land. In contrast, the impact of land registration was relatively small. Additionally, financial institutions appear to have adopted a more aggressive lending stance during this period, further driving the growth in outstanding debt. Originality/value This study is the first to examine the effect of land prices on household debt to financial institutions in a developing country like Cambodia. In the Cambodian context, its originality lies in the analysis of the mechanism of increasing households’ debt to financial institutions and the role of land registration.