Micro credit in rural Thailand: the role of credit in rural development in Thailand?

Abstract

This thesis examines the role of micro credit services in two villages in Phitsanulok province in rural lower northern Thailand. The study explores access to different forms of micro credit and how it differs from the traditional perception of rural credit in Thailand, as loans used by rural farmers with land titles as collateral.

The Royal Thai Government is strongly encouraging all credit institutions to increase lending to low-income households. There are a variety of micro credit services and sufficient resources to finance a very significant increase in loans to rural households. There are substantial funds available through the departments, organisations and institutions reviewed in this study. However, at a micro-level, it still seemed that loans are going to wealthier households with collateral. The greater amount of credit is allocated to the better off households and the poor are excluded from almost all sources of informal and formal credit sources.

The thesis points out that BAAC and GSB have a strong capital base. However, these bank has a comprehensive network at the district level, but its operation is not as close to peasants as sajja oomsap, or PDA. These organisations only have the constraint of small working capital. The two types of organisation may operate in conjunction with each other, BAAC or GSB may become the credit wholesales with sajja oomsap and Credit NGOs acting as retailer at village level.