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Cases and Studies of Microfinance in Thailand
 Country
Profiles & Data
Articles and Papers in English
The Impacts of Credit on Village Economies
By Joseph P. Kaboski and
Robert M. Townsend (4 May 2006, draft still missing conclusions,
etc.)
Outside studies such as those by Kaboski and Townsend at
University of Chicago note that access to credit, consumption, and household
income have all increased among Village Fund participants, even though the
program has a higher than average level of defaults and less elimination of
informal lending than was anticipated. But the social benefits have also
been significant: the sense of belonging and participation that are emerging
through local community financial management. Many village committees take
it upon themselves to use a portion of their profits for disadvantaged local
non-members with public welfare projects for children and the elderly, for
example (as a form of micro-CSR). From a knowledge management sense, we are
seeing the growth of learning networks between committees and agency staff,
so that best and worst practices are shared and adapted in formal and
informal ways.
Abstract: This paper provides an early evaluation of
the impact of Thailand’s ‘Million Baht Village Fund’ program. The program,
introduced in 2001, is the largest scale government microfinance initiative
in the world to date — costing about 1.5 percent of GDP. We use both pre-
and post-program panel data, and quasi-experimental variation stemming from
the way credit was given to different villages, to evaluate the short run
impacts on the villages receiving the program. We find that the village
funds have increased total short-term credit, consumption, and income growth
but decreased asset growth. Credit increased for agricultural investment and
consumption, and interest rates increased, as did default rates and informal
borrowing in the year after loans. Agricultural investment increased, while
business investment did not. Nonetheless, business income increased
(especially in female-headed households) as did labor income. We view the
impact on labor income and interest rates as important general equilibrium
effects of the programs.
Thai
Townsend project
Thailand Best Practices and Lessons Learned: Community-Based Microfinance
Published 2006 by the Thailand
International Development Cooperation Agency (TICA) of the Ministry of Foreign
Affairs and the United Nations Development Programme (UNDP) in Thailand.
Excerpts: Several decades of
extensive community-based rural development programmes undertaken by various
government and non-governmental organizations in Thailand have resulted in the
overall achievement of reducing poverty and improving rural well-being. Many of
these community-based programmes have been initiated or generated by local
communities or villagers themselves. Experiences from these programmes have
shown that people are capable of initiating and managing development activities
on their own. The communities’ initiatives are better responsive to their needs
and problems, while enabling rural communities to find their own suitable
solutions to these problems and to become self-reliant. This has been a rational
for the Royal Thai Government’s adoption of “people-centred development” as
clearly outlined since the 8th National Economic and Social
Development Plan to the current 9th National Plan.
One of these
successful community-based development programmes is a microfinance scheme,
which aims to mobilize local financial resources to help rural people solve
their problems and to serve as resource for their community’s activities. This
microfinance scheme has emerged as an effective medium through which credit can
reach the poor. It is a key instrument for poverty alleviation efforts at the
community level. In Thailand, there are several community-generated microfinance
projects implemented by different communities and local NGOs nationwide. With
this development through the years, Thailand can share their lessons learned and
best practices in this area with other developing countries within the region
and beyond.
Thailand Human Development Report 2007: Sufficiency Economy and Human
Development - English version (Click here for
Thai version)
Published 2007, commissioned by
UNDP Thailand.
The Sufficiency Economy is an
innovative approach to development designed for practical application over a
wide range of problems and situations. This approach was formulated by King
Bhumibol Adulyadej of Thailand as a result of his long experience in development
work. Owing to its practical nature, its robust simplicity, and its special
relevance in the era of globalization, the approach deserves to be more widely
known…
The
Thailand National Human Development
Report 2007 focuses on these ideas. The approach of human development
puts people and their well-being at the centre of development and provides an
alternative to the traditional, more narrowly focused economic growth paradigm.
Human development is about people, and about expanding their choices and
capabilities to live long, healthy, knowledgeable, and creative lives. The
thinking on the Sufficiency Economy clearly belongs in the realm of human
development. It focuses on humanity, makes sustainability key, favours
well-being over wealth, and insists on the importance of learning.
MDG-Plus: a case study of Thailand
Prepared by UNDP Bureau for
Resources and Strategic Partnerships
Excerpts: Thailand
exemplifies how the Millennium Development Goals can be put to good use in a
middle-income country that has already achieved most of the MDGs well in advance
of the 2015 deadline. The process to transform the MDGs into a floor instead of
a ceiling for human development and ultimate commitment to these adapted goals,
known locally as MDG-Plus, has made the MDG-Plus a mobilizing and agenda-setting
theme in Thailand. The adaptation process, technical work and related
campaigning in Thailand has helped to:
-
focus attention on vulnerable groups,
minorities and more neglected regions and issues;
-
re-prioritize and refine Government
development planning in favour of pro-poor interventions, including through
Cabinet approval of the MDG-Plus targets;
-
broaden the ownership of MDG and
development processes across Government ministries, academic institutions,
civil society organizations and UN agencies;
-
reinvigorate Thailand’s response to
HIV/AIDS after a period of complacency, and help to shape the Government’s
policy shift;
-
support the Government in revising the
national poverty line to better capture the real extent and distribution of
poverty;
-
improve development planning at the
provincial level by applying the MDG framework as a broad-based and
results-oriented strategic planning tool;
-
prompt the Government to take measures to
improve its capacity to monitor human development; and
-
set the vision for Thailand’s contribution
to Goal 8 as an emerging donor and leader in regional cooperation.
ERD Working Paper No. 9 by Brett E. Coleman April 2002
Abstract: This paper evaluates the outreach and impact
of two microfinance “village bank” programs that target the poor in
Northeast Thailand. It controls for endogenous self-selection and program
placement, using data from a unique survey conducted in 1995-1996. Results
indicate that even prior to program intervention, participants tend to be
significantly wealthier than non-participants, and the wealthiest villagers
are almost twice as likely to participate in the program as the poorer
villagers. Moreover, the wealthiest in the village often become program
committee members and use their positions to borrow substantially more than
rank and file members. However, local information on individual
creditworthiness is also used in member selection. Results demonstrate that
microfinance loans positively affect many measures of household welfare for
the wealthy committee members, but the impact is largely insignificant for
poorer rank and file members. Policy recommendations include increased
vigilance in targeting the poor, greater efforts to publicly disseminate the
rules and purpose of the village bank program, and introduction and
enforcement of eligibility criteria based on wealth while continuing to
allow villagers to self-select.
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