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Table 2 Overview of informal credit types and associated conditions

From: Toward a typology of health-related informal credit: an exploration of borrowing practices for paying for health care by the poor in Cambodia

Type of credit and characteristics Advantages and disadvantages Frequency of use for health care* Level of economic risk**
Short-term loan (Luy Roab)   +++++ ++++
· Short lending period: 10–20 days · Quick, easy access; addressing urgent requirements   
· Relatively small amounts · High interest rates coupled to daily repayment   
· Daily repayment    
· High interest (20%), to be paid as extra days of repayment    
· Common in areas with commercial activities    
· Usually no requirement for collateral or paper work    
Medium-term loan (Luy Ruos)   +++ +++
· Lending period few months to a year · Large amount for relatively long period   
· Relatively big amount · High interest rates and requirement for collateral, making it less accessible for poor people   
· Interest rates of 5-10% per month    
· Deadline for repayment    
· Collateral required as well as official transaction    
Seasonal loan   ++ ++
· In-between season lending: 6–10 months · Easy access for farmers   
· Relatively big amounts · Repayment follows the farming cycle which is convenient for rural people   
· Interest rates of 50-100% for the season · Repayment in kind, just following harvest when prices are low   
· Repayment after harvest, in crops    
· Very common
Simple or no conditions
   
Loans for unspecified period (Luy Ngoab or Luy Chho)   ++++ ++
· Unspecified period · Easy access for the poor   
· Variable amount · Absence of repayment deadline is favourable for poor people   
· Relatively high interest: 1%/day; 5-30%/month · High interest rates,   
  · requirement for collateral for big amounts   
· Flexible timing for repayment    
· Collateral for large amounts    
Loans with repayment in labour (Yok Dai)   + +
· Variable, though mostly short, lending period · Easy access, especially for the poorest   
· Relatively small amount · No money required, independent of cash flow   
· Interest of 100% for whole period · Undervalued labour   
· Repayment in labour valued at 50% · Hampers foraging on which poor depend for survival   
· Only available in rural areas · High interest rates   
· No lending conditions    
  1. * rated from the less frequent ‘+’ to the most frequent ‘+++++’; ** rated from the lowest ‘+’ to the highest ‘++++’.
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