Thai Govt Vows More Cash For Loans To Poor

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Govt vows more cash for loans to poor

By WICHIT CHAITRONG,

NOPHAKHUN LIMSAMARNPHUN

THE NATION

Pracha Wiwat project for taxi drivers, vendors could top Bt5 billion: Korn

The Pracha Wiwat policy launched by the government 40 days ago has met a mixed response. A growing number of critics are accusing the government of wasting resources for political benefit. But, supporters insist the measures are good for low-income groups.

Finance Minister Korn Chatikavanij, who is leading the committee implementing this policy, told The Nation yesterday that the rationale behind the Pracha Wiwat scheme is to create a strong grassroots economy. The groups targeted are street vendors, taxi drivers, motorcycle taxi drivers and the rural poor.

"We've launched a price-guarantee scheme so farmers don't lose to corruption. We are also working on land reform and debt issues for the poor," Korn said. "The village fund is being upgraded into a community bank, while a postal bank will be set up to serve micro-borrowers."

The finance minister also officially kicked off the Bt5-billion Pracha Wiwat loan scheme yesterday to provide financial help to taxi drivers, vendors and motorbike-taxi drivers.

"If Bt5 billion is not enough, the government will consider increasing the amount," Korn said, adding that he hoped taxi drivers will buy their own vehicles instead of leasing them on a daily rate of Bt550 to Bt600.

Down payments for new vehicles have been cut down to 5 per cent from the usual 20 per cent of the price, provided taxi drivers get together to offer cross-guarantees on credit.

Government Savings Bank (GSB), Bank for Agriculture and Agricultural Cooperatives (BAAC), Islamic Bank of Thailand (Ibank), Small and Medium Enterprise Development Bank of Thailand and Krung Thai Bank have joined the loan scheme.

To qualify for a loan, taxi drivers must have at least three years experience and should be able to pay back a maximum of Bt800,000 within six years at an interest rate of 6.5 to 6.75 per cent.

Street vendors can seek a loan of up to Bt100,000 each, with a payback period of no more than five years at an interest rate of between 9 and 18 per cent per annum. If vendors borrow as a group, the interest rate would be lower at 6 to 12 per cent per year. Small entrepreneurs can also borrow up to Bt10,000 in one go.

Motorbike-taxi drivers, who register with the Bangkok Metropolitan Administration for a licence, will be eligible for a loan of up to Bt100,000 at 12 per cent interest per year, though they would pay only 6 per cent if they applied as a group.

Banks are expected to complete this lending scheme in July. Luck Wajananawat, president of BAAC, said so far 50 entrepreneurs had applied and the bank had approved five loans, each worth Bt30,000.

Lersak Chuladesa, president and chief executive officer of the GSB, said the bank had approved loans worth Bt18.2 million for 543 borrowers.

Besides all these loan offers, the Pracha Wiwat scheme includes free electricity for low-income households using 90 units or less per month, the capping of diesel price at Bt30 per litre and the government's co-payment for informal workers to join the social security fund.

Free electricity for the poor could mean a higher tariff for middle-class households and other large power users, while the subsidy on diesel would cost the government Bt3 billion to Bt5 billion per month.

Overall, the Pracha Wiwat scheme should certainly help the Democrat-led government win more votes in the upcoming election.

-- The Nation 2011-02-15

[REM]

Micro-loans can be a great thing, but this seems like one part help, two parts pandering. I like the quote that says "...so farmers don't lose to corruption....", which is just another form of the institutionalization of corruption, and the only mention of farmers in the article. Logic would tell me that to make people less susceptible to corruption, we need to get rid of corruption, not loan money to those susceptible to it, so they can pay for the corruption with an interest rate up to 20%.

The fallacies in the logic are so apparent and bold, that it should be considered embarrassing, not praised. But hey, what would a farang know. I'm still waiting for laws that make people accountable for their actions, corruption and plainly dishonest actions in the business world.

[swifty5x5]

Micro-loans can be a great thing, but this seems like one part help, two parts pandering. I like the quote that says "...so farmers don't lose to corruption....", which is just another form of the institutionalization of corruption, and the only mention of farmers in the article. Logic would tell me that to make people less susceptible to corruption, we need to get rid of corruption, not loan money to those susceptible to it, so they can pay for the corruption with an interest rate up to 20%.

The fallacies in the logic are so apparent and bold, that it should be considered embarrassing, not praised. But hey, what would a farang know. I'm still waiting for laws that make people accountable for their actions, corruption and plainly dishonest actions in the business world.

Agree.

[exbelg]

personally : end the corruption and give the rice farmers a good price for their crop, because now the major profits do not go to the people who grow and produce, but as usual, the middle man comming to buy the crops at the lowest price possible, the large coorporation buying from the middle man, transportation and to end, the super markets which double or tripple the initial price for anything

[prvtdetdave]

One clause in the loan program is to make sure they have a Farang son in law. You need to ask?