17.2.10
Busy with Visitors
We have had the honour of hosting a number of guests during the past month. Microfinance in Thailand is attracting attention both domestically and internationally. Up until recently, Thailand has not been known as a country with a large microfinance network. While many small programs are operated by NGOs, nearly all large programs were operated through the government such as the 1 million baht program, the Government Savings Bank, etc. In late 2009, the Bank of Thailand and the Ministry of Finance created a new Financial Master Plan which included the promotion of microfinance by non-governmental sources.
The new Master Plan has a significant impact on the existing microfinance players in the country. While the new laws appear to promote microfinance activities in Thailand, it limits players to the commercial banking sector. Many of us are still struggling to determine how the new plan affects our own operations. Apparently, we are not the only ones trying to understand the implications. During the past month, we have had visitors from several social investment funds, the Bank of Thailand (BOT), the Bank for Agriculture and Agricultural Cooperatives (BAAC) and even the International Finance Corporation (IFC). All of these organizations have come to help better understand how the new laws affect microfinance operations such as ours.
The new Master Plan has a significant impact on the existing microfinance players in the country. While the new laws appear to promote microfinance activities in Thailand, it limits players to the commercial banking sector. Many of us are still struggling to determine how the new plan affects our own operations. Apparently, we are not the only ones trying to understand the implications. During the past month, we have had visitors from several social investment funds, the Bank of Thailand (BOT), the Bank for Agriculture and Agricultural Cooperatives (BAAC) and even the International Finance Corporation (IFC). All of these organizations have come to help better understand how the new laws affect microfinance operations such as ours.
Representatives from the BAAC observe a collection day with
Common Interest in Mae Taeng.
16.2.10
The Police are the Loan Sharks
Last week, Common Interest staff were collecting payments from one of its communities. One of our members admitted that she had to borrow some money from a moneylender in order to fulfill her commitment to us. While this kind of situation is never ideal, it inevitably happens in all microfinance programs.
The topic of loan sharks is frequently in the newspapers as the Thai government is currently trying to crack down on this illegal business. Our staff took the time to ask the woman about the terms of her loan with the loan shark. She had agreed to borrow some money for 10 days and repay it with 10% interest. Not including additional fees that she had to pay, this works out to over 1% per day in interest charges. Horrified at the rate, our staff told the lady to repay the moneylender and we could sort out a better alternative with her. We also suggested that she report this person to the police. It was then that she told us that it was the police who leant her the money.
Loan sharks and illegal moneylenders flourish in Thailand because many of them are connected to politicians or enforcement officers. Threats of imprisonment or even denial of government services are one way that moneylenders threaten their clients. We wish the government the best in its attempt to crack down on these criminals but we know that it is no simple task when the people enforcing the laws are also the ones breaking them.
The topic of loan sharks is frequently in the newspapers as the Thai government is currently trying to crack down on this illegal business. Our staff took the time to ask the woman about the terms of her loan with the loan shark. She had agreed to borrow some money for 10 days and repay it with 10% interest. Not including additional fees that she had to pay, this works out to over 1% per day in interest charges. Horrified at the rate, our staff told the lady to repay the moneylender and we could sort out a better alternative with her. We also suggested that she report this person to the police. It was then that she told us that it was the police who leant her the money.
Loan sharks and illegal moneylenders flourish in Thailand because many of them are connected to politicians or enforcement officers. Threats of imprisonment or even denial of government services are one way that moneylenders threaten their clients. We wish the government the best in its attempt to crack down on these criminals but we know that it is no simple task when the people enforcing the laws are also the ones breaking them.
