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.
4.1.10
Social Survey
December is full of holidays and a difficult time to plan any kind of activities. Common Interest decided to use this time to conduct a survey of its members in order to get a better idea of how our programs impact communities. Approximately 5 members were randomly chosen from each of our Village Banks. The total number surveyed was 208 which equals 16% of our total membership. The responses to our three questions were as follows:
1. How has Common Interest's Village Banking Program impacted your family?
76% - Increased the profit from family's farm or small business
70% - Have more financial liquidity
63% - Quality of life is better
54% - Purchased more agricultural equiment
40% - Debt was reduced
36% - Have more working capital
20% - Started a new business
20% - Debt increased
2. How has Common Interest's Village Banking Program impacted your community?
98% - Started saving for the future
95% - More people have access to loans
86% - We have place for saving
84% - Women in our community work better together
73% - Our community is stronger
3. Where else do you have loans from?
76% - One Million baht program (government program)
33% - Village Fund (government program)
31% - BAAC (government agriculture bank)
13% - Government Savings Bank
10% - Village "Poverty Solution Fund" (government program)
6% - Nim Sing Seng (private money lender)
1. How has Common Interest's Village Banking Program impacted your family?
76% - Increased the profit from family's farm or small business
70% - Have more financial liquidity
63% - Quality of life is better
54% - Purchased more agricultural equiment
40% - Debt was reduced
36% - Have more working capital
20% - Started a new business
20% - Debt increased
2. How has Common Interest's Village Banking Program impacted your community?
98% - Started saving for the future
95% - More people have access to loans
86% - We have place for saving
84% - Women in our community work better together
73% - Our community is stronger
3. Where else do you have loans from?
76% - One Million baht program (government program)
33% - Village Fund (government program)
31% - BAAC (government agriculture bank)
13% - Government Savings Bank
10% - Village "Poverty Solution Fund" (government program)
6% - Nim Sing Seng (private money lender)
12.12.09
Bank of Thailand Visit
Common Interest hosted 18 members from the Bank of Thailand (BOT) on Friday. The purpose of the trip was for the the BOT to get a better understanding of current microfinance programs being offered in the country. A full day was spent in Phrao as the BOT watched and interacted with members who came for collections.
The day also allowed Common Interest the opportunity to ask questions and get clarification on the new Master Plan Phase II. The Master Plan includes a framework for microfinance activity in Thailand which will have a significant impact on how organizations can operate into the future. Both parties found the day to be very productive.
The day also allowed Common Interest the opportunity to ask questions and get clarification on the new Master Plan Phase II. The Master Plan includes a framework for microfinance activity in Thailand which will have a significant impact on how organizations can operate into the future. Both parties found the day to be very productive.
8.12.09
Common Interest to Host Bank of Thailand
Dec 8, 2009
Common Interest is hosting a 20-member team from the Bank of Thailand (BOT) this Friday. Senior policy directors from Bangkok will be arriving into Chiang Mai to spend the day learning more about Common Interest and its microfinance program.
The reason for the visit stems from the government’s recent decision to revise the regulations governing microfinance activities in the country. Co-sponsored by the Ministry of Finance and the BOT, the Master Plan Phase II provides a new framework in which microfinance will be able to legally operate. Currently, there is no clearly defined legal structure. While the goal is to promote the microfinance sector, it will also have a significant impact on the 30+ organizations that currently operate in Thailand.
The new regulations promote the commercial side of microfinance. By making the microfinance sector “business-friendly,†the hope is that large-scale operations will be attracted to the potential for huge profits. The assumption is that by increasing the number of players, the competition will not only reach more people but will lower the transaction costs for the client. The BOT is hoping that several local banks will be attracted to start microfinance programs right away. To increase the incentive to start, local banks will given a 2 year head start on others. From 2010-2012, local banks will be the only institutions granted a microfinance licence.
These changes have a significant impact on the existing non-governmental microfinance programs. Not only do most lean to the social side of the spectrum, very few have the potential to be commercially viable. Many worry that the new changes will the existing MFIs to close down
The BOT has decided to visit a number of organizations to get a better understanding of how the new regulations will affect the microfinance sector. Common Interest is looking forward to presenting our concerns to the government and collaborating to find a workable solution.
Common Interest is hosting a 20-member team from the Bank of Thailand (BOT) this Friday. Senior policy directors from Bangkok will be arriving into Chiang Mai to spend the day learning more about Common Interest and its microfinance program.
The reason for the visit stems from the government’s recent decision to revise the regulations governing microfinance activities in the country. Co-sponsored by the Ministry of Finance and the BOT, the Master Plan Phase II provides a new framework in which microfinance will be able to legally operate. Currently, there is no clearly defined legal structure. While the goal is to promote the microfinance sector, it will also have a significant impact on the 30+ organizations that currently operate in Thailand.
The new regulations promote the commercial side of microfinance. By making the microfinance sector “business-friendly,†the hope is that large-scale operations will be attracted to the potential for huge profits. The assumption is that by increasing the number of players, the competition will not only reach more people but will lower the transaction costs for the client. The BOT is hoping that several local banks will be attracted to start microfinance programs right away. To increase the incentive to start, local banks will given a 2 year head start on others. From 2010-2012, local banks will be the only institutions granted a microfinance licence.
These changes have a significant impact on the existing non-governmental microfinance programs. Not only do most lean to the social side of the spectrum, very few have the potential to be commercially viable. Many worry that the new changes will the existing MFIs to close down
The BOT has decided to visit a number of organizations to get a better understanding of how the new regulations will affect the microfinance sector. Common Interest is looking forward to presenting our concerns to the government and collaborating to find a workable solution.
31.10.09
2009 Women's Conference
Oct 31 - Common Interest held is annual conference today. 87 women representing every Village Bank in Phrao, Mae Taeng, Mae Wang, Mae Chaem, Chomtong and Sankamphaeng were in attendance. 
The morning session was held at Nakorn Payap International School with a guest speaker from Bangkok. Sutut Chitmonkongsuk, a Vice President from Standard Chartered Bank, volunteered to conduct a session on personal finance for our members. In addition to his work at Standard Chartered, Khun Sutut is a finance professor at Ramkhamheang University and is one of a handful of Certified Financial Planners in Thailand. Members were very impressed and appreciative of his advice on managing their personal finances.
The afternoon was held in Doi Saket where members were able to visit a small-scale farmer, Hia Daeng. By utilizing his .5 rai of land, Hia Daeng has been able to create a small farm that is proving to be very profitable. Members were able to see how fish, frog, geese and pig farming can be combined in a small area to produce big results.
26.10.09
Common Interest Accepted into BWTP
Common Interest is pleased to announce that it has been accepted as a member into the Banking with the Poor Network. Common Interest will be the second institution from Thailand accepted into the Network's membership.
The Banking with the Poor Network (BWTP Network) is Asia’s microfinance network that works towards building efficient, large-scale sustainable organisations, through co-operation, training and capacity building with the aim of achieving innovative, appropriate and demand-driven financial services for the poor. The Network is an association of a diverse range of microfinance stakeholders committed to improving the quality of life of the poor through promoting and facilitating their access to sustainable financial services. The BWTP Network is an initiative of the Foundation for Development Cooperation and its Secretariat is based in Singapore.
The Banking with the Poor Network (BWTP Network) is Asia’s microfinance network that works towards building efficient, large-scale sustainable organisations, through co-operation, training and capacity building with the aim of achieving innovative, appropriate and demand-driven financial services for the poor. The Network is an association of a diverse range of microfinance stakeholders committed to improving the quality of life of the poor through promoting and facilitating their access to sustainable financial services. The BWTP Network is an initiative of the Foundation for Development Cooperation and its Secretariat is based in Singapore.
