Thai village funds prove critics wrong

[webfact]

Village funds prove critics wrong

By Chularat Saengpassa 
The Nation

 

 

Democratisation of spending encourages new jobs and better loan repayments

 

BANGKOK: -- ONCE DUBBED as a populist policy, the country’s Bt1-million village-fund project has gone from strength to strength over the past 16 years. 

 

At present, the project has given birth to more than 2,560 community-based financial institutes. Its non-performing loans (NPL) rate is about four per cent. 

 

“And although there are more than 70,000 village funds across the country, we have received just 2,000 complaints about it,” National Village and Urban Community Fund Office’s chief executive Natee Khlibtong said recently.

 

He said his office defines NPLs differently from banks, because village funds are closer to their members. 

 

“For as long as our members still live in the village, we have not treated their debts as NPLs,” Natee said. 

 

Launched in 2001 during the Thaksin Shinawatra government, the project drew much criticism. Several academics said it was just a populist policy with a significant risk of failure. 

 

The project has proven all its critics wrong. 

 

Just as it has extended funding access to people who are often shunned by commercial banks, it has allowed them to upgrade their occupational qualifications and evade the danger of loan sharks. 

 

As village-fund members improved their financial status, the economy became stronger, which in turn benefited the country. 

 

Over time, the Bt1 million-per-village fund project has expanded and transformed into the National Village and Urban Community Fund. 

 

The current government led by General Prayut Chan-o-cha has used village and urban community funds to strengthen local economies. The government has allocated Bt40 billion for developing these funds further, Bt60 billion for loans that will be interest-free for two years, and Bt35 billion for developing community infrastructure. 

 

This is expected to create jobs and further boost the potential of communities.

 

In addition, the Prayut-led administration is expected to approve Bt15 billion for strengthening village and communities via its Pracha Rath policyon July 31. 

 

Aside from money, the government has extended various other forms of support for this project. 

 

Prime Minister’s Office Minister Suvit Maesincee, who oversees the National Village and Urban Community Fund Office, said the government would be equipping village and urban community funds with knowledge. 

 

“We will teach fund members about laws, digital technology, accounting, financial planning and marketing,” he said. 

 

According to Suvit, the Attorney-General’s Office and the Justice Ministry will help provide legal knowledge. 

 

“We will also inculcate financial discipline in fund members,” he said. 

 

Suvit said the Digital Economy and Society Ministry would partner with village and urban community funds to teach their members about IT, and digital knowledge. The Commerce Ministry, meanwhile, would teach fund members about marketing. 

 

“Such knowledge will boost the sustainability of the funds and fund members,” he said. 

 

Suvit emphasised that village and urban community funds must embrace HM the late King Bhumibol Adulyadej’s “sufficiency economy philosophy” based on the self-reliance concept and networking guidance. 

 

At the same time, they must also follow HM King Maha Vajiralongkorn’s outstanding virtues about sufficiency, discipline and public-mindedness. “In the face of a volatile global economy, the government focuses on strengthening the Thai economy from within,” Suvit said. “We will create a society that promotes fairness, opportunities and abilities.” 

 

Suvit described fair economic opportunities as a form of “economic democracy”. 

 

Source: http://www.nationmultimedia.com/detail/national/30322272

 

-- © Copyright The Nation 2017-07-31

[Moonmoon]

Good to see an Elected government's policy still doing well after so many years. 

 

Now what about the return happiness to people's policies? Economy is going to the gutters. Next year will be even worse. Brace yourself for the hit people.

[Ricardo]

6 hours ago, webfact said:

He said his office defines NPLs differently from banks, because village funds are closer to their members. 

 

“For as long as our members still live in the village, we have not treated their debts as NPLs,” Natee said. 

 

Well that's an excellent way to fudge the numbers on NPLs, just don't count them, unless the defaulting-borrower moves away, Amazing Thailand strikes again !

[YetAnother]

12 hours ago, webfact said:

Suvit described fair economic opportunities as a form of “economic democracy”. 

yeah ? well there is this small thing called 'corruption' that is septic

[YetAnother]

5 hours ago, Ricardo said:

 

Well that's an excellent way to fudge the numbers on NPLs, just don't count them, unless the defaulting-borrower moves away, Amazing Thailand strikes again !

yeah; this 'logic' is really a wide orbit; these kinds of people call black white and white black

[chickenslegs]

The project has been benefiting Thai people for 16 years - under nine governments and 12 Prime Ministers (including the military and both major political parties) who have all seen its value and continued its funding.

 

But some Thaivisa posters can see through the sham.

 

 

 

Edited July 31, 2017 by chickenslegs
Splerring

[Eric Loh]

23 minutes ago, chickenslegs said:

The project has been benefiting Thai people for 16 years - under nine governments and 12 Prime Ministers (including the military and both major political parties) who have all seen its value and continued its funding.

 

But some Thaivisa posters can see through the sham.

 

 

 

You are confusing yourself with nano-financing or micro loans and village fund. Village fund was a Thaksin initiative and only started in 2001. Lots of difference. 

[Ricardo]

I wonder what the real unadjusted NPL-percentage is ?

[scorecard]

58 minutes ago, Eric Loh said:

You are confusing yourself with nano-financing or micro loans and village fund. Village fund was a Thaksin initiative and only started in 2001. Lots of difference. 

 

Hey el, I can sell you the Sydney harbour bridge for a couple of thousand Baht. 

[chickenslegs]

2 hours ago, Eric Loh said:

You are confusing yourself with nano-financing or micro loans and village fund. Village fund was a Thaksin initiative and only started in 2001. Lots of difference. 

Started under Thaksin in 2001, still going in 2017, uninterrupted by changes of government nor PM's. (I make that 16 years).

Maybe you misread my post.

[tomta]

Back in 2005, I was an anti-Thaksin guy - war on drugs, Tak Bai, authoritarian tendencies. I still am anti-Thaksin for all that. But my wife took me up to her uncle's place in Mahasarakham. He was relatively well-educated, had one of the newest houses in the village, entrepreneurial (he had a sideline growing ugly bulbous plants with special breeding that apparently appealed to some people because they fetched high prices). And he was the village health officer - smoked like a chimney and drank like a fish - a bit like me. So one day we went off to his fields outside the village, he kept in touch with his roots, this was his weekend job, he didn't have to do it. I spent a backbreaking 4 or 5 hours harvesting cassava plants and then it was time to repair to the new sala he had built over the pond.  Mildly fancy building with a few mod cons, electricity, TV and whisky. He plied me with questions and ideas. What do you think about black rice or bamboo shoots instead of cassava, Tom? I'm all for that, cassava's too bloody hard. How do you think my sala would work as a homestay place, Tom? Sure, as long as you don't get them to harvest cassava, i said. So pleasant afternoon. Nawat knows and understands my dislike of Thaksin. We're drinking whiskey (JW Red, he has pretensions, not Lao Khao for him) watching tele, listening to the radio, chatting, all very pleasant). And my attention is drawn to the solar power unit that is enabling this pleasant time (and aiding his farming). Wow, that's great, sez I, how much? And he draws himself back, and very knowingly and quite deliberately and enjoying himself very much, taking the piss out of me, says, "Ahhh, Khun Tom, Mr Thaksin gave it to me".

 

[tomta]

The penny had dropped. It was the village fund. Sure, as one of the smart guys in the village he might have got first dibs on the money for his little solar power unit - maybe worth 10,000 baht. But It seemed to me an unambiguously good thing. Environmentally friendly, oriented to a better future, making farming more productive and easier, showing the way to others. And at the same time the PAD back in BKK were ranting about how the villagers were being spoiled by new mobile phones, motorbikes, and pick-up trucks (all of these have clear  uses as agricultural tools - ring the missus to tell her to bring lunch and some needed tools on the motorbike or pick-up truck and and now of course the smartphone can be used to check the weather and the current price and prospects of bamboo shoots). This was a great revelation to me and I think Thaksin's micro-economic strategies were enormously clever and effective and will last.

[tomta]

enormously clever and effective   ---- and of course, empowering

[Ricardo]

15 hours ago, scorecard said:

 

Hey el, I can sell you the Sydney harbour bridge for a couple of thousand Baht. 

 

Except for Christmas-week, when I own the rights to charge the toll, isn't time-share a wonderful thing !