Report on Best Practices for Sustainable Models of Pro-Poor Rural Financial Services in THAILAND Training Modules and Resourcebook APRACA RuFBeP Publication: 2015-16/1 Report on Best Practices for Sustainable Models of Pro-Poor Rural Financial Services in THAILAND Edited by Prasun Kumar Das and Michael Hamp An APRACA RuFBeP Publication funded by the International Fund for Agricultural Development (IFAD) i Training Modules and Resourcebook ©2016 by the Asia-Pacific Rural and Agricultural Credit Association (APRACA) Disclaimer: The opinions expressed in this publication are those of the authors and do not necessarily represent those of Asia-Pacific Rural and Agricultural Credit Association (APRACA) and International Fund for Agricultural Development (IFAD). The designation employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of APRACA and IFAD concerning the legal status of any country, territory, city or area or of its authorities or concerning the delimitation of its frontiers or boundaries. The designations ‘developed’ and ‘developing’ countries are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. All Rights reserved ISBN 978-616-92335-6-5 Cover Photo Credit: Michael Hamp and Sofia Champanand Printed June 2016 Distribution For Copies write to: The Secretary General Asia-Pacific Rural and Agricultural Credit Association (APRACA) Room No. A 303, BAAC Building 469 Nakhonsawan Road, Dusit, Bangkok 10300, Thailand Tel: +66 2 280 0195, Fax: +66 2 280 1524 E-mail: [email protected] Website: www.apraca.org Secretary General Chamnong Siriwongyotha Project Manager Prasun Kumar Das Layout Credit Sofia Champanand This report published by APRACA under the auspices of the IFAD grant supported APRACA RuFBeP project. This report is published under the incumbencies of Mr. Shitangshu Kumar Sur Chowdhury (APRACA Chairman) and Mr. Maha Prasad Adhikari (APRACA Vice-Chairman), Mr. Chamnong Siriwongyotha (APRACA Secretary General) and Dr. Prasun Kumar Das (RuFBeP Project Manager) ii Training Modules and Resourcebook Foreword Promoting pro-poor growth is a pattern of growth that is inclusive and enhances the ability of impoverished people to participate, benefit in, and contribute to the growth process. This is a critical factor for developing countries to achieve a sustainable way out of poverty and to enable achievement of the Sustainable Development Goals. The causes of poverty are complex and multi-dimensional. They involve, among other things, climate, gender, markets, access to finance and public policy. Likewise, the poor are quite diverse in both the problems they face and the possible solutions to these problems. Poverty remains a predominantly rural problem with a majority of the poor in developing countries living in rural areas. It is estimated that 76 percent of the developing world’s poor live in rural areas whereas only about 58 percent of the overall global population lives in rural areas. Because of the complexity of rural poverty, each country needs to evolve its own strategy for addressing the concerns of rural poor that is in tune with its socioeconomic ethos. APRACA has been in the forefront to lead access to finance in the rural areas through its member institutions in the Asia-Pacific region by providing technical assistance in capacity building, research and knowledge management. We are fortunate enough to receive generous funding from International Fund for Agricultural Development (IFAD), the global leader in development finance for implementing a project to ‘Document Global Best Practices on Sustainable Models of Pro-Poor Rural Financial Services in Developing Countries (RuFBeP project)’. The knowledge gathered will help APRACA in disseminating the information that promotes innovations, productivity, inclusive growth, self-reliance, and welfare of the rural poor in the region and benefit the member institutions in 21 countries across the region. We are confident that documenting the best practices on sustainable practices of pro-poor financial services in the countries like China, India, Indonesia, Philippines, and Thailand will be extremely useful to the countries in the Asia-Pacific region to draw lessons in evolving suitable strategies for the benefit of their people and will add value to global knowledge resources. This country report on rural finance best practices in Thailand is a part of the series of country reports being published by APRACA with the financial support from International Fund for Agricultural Development (IFAD). Chamnong Siriwongyotha APRACA Secretary General iii Training Modules and Resourcebook Acknowledgements The editors of this document are thankful to the International Fund for Agricultural Development (IFAD) for funding the study as a part of the ‘RuFBeP’ Project. Acknowledgements are due to the contributors of this document developed through research, development of cases, review and validation of information and recommendations. They are: a) Research team of Bank for Agriculture and Agricultural Cooperatives (BAAC), Thailand b) Research Team of Department of Agricultural Extension, Government of Thailand consists of: Dr. Surangsri Wapet; Mr. Sukol Kositphokin; Mr. Theerapat Kumkrong; Ms. Wilaiporn Chawasri; Dr. Prinyarat Poosiri; Mrs. Chalintorn Anutaraporn; Ms. Surapa Yeamsri; Ms. Mayuree Boonyasenekul; Mrs. Somjai Suppaso; Mrs. Vollayada Namruengsri; Mr. Kanok Sawatphon; Ms. Kanittha Sonboon; Ms. Chenchira Palachai; Mr. Sane Thongkliang and Mr. Sumran Sarabun (consultant) The contributors from BAAC acknowledged Mr. Luck Wajananawat, President of BAAC, Mr. Nipath Kuasakul, Executive Vice President, Ms. Apinya Punyarit, Senior Vice President, Savings Department, Mr. Khajornkiat Buasri, Director of Office of Community Enterprise and Village Fund Loans, Mr. Chamnong Siriwongyotha, APRACA Secretary General for their support and authorization. The BAAC research team also would like to put in record the logistics support extended by the Management and staff of Ubon Ratchathani and Chumphon provincial offices of BAAC led by Ms. Suwimon On-Indra, and Mr. Manop Jinamai, Director of Ubon Ratchathani and Chumphon Provincial office respectively during the field survey. The BAAC team like to convey their deep gratitude to Mr. Semapon Kidkem, President of Suk Samran CFI, Mr. Pisarn Kasemsook, Manager of Suk Samran CFI, Mr. Wiruch Phoomala, Branch Manager of BAAC Tha-Sae Branch, Mr. Prawit Tepruangsikul, Manager of BAAC Khamcharoen Branch, Mr. Jiamsak Khansorn, Manager of BAAC Sirindhorn Branch, President and Manager of Don Moo Community Financial Institution (Community Fund) for their valuable information and rich insights. The research team of DOAE likes to put in record our deep gratitude APRACA for giving them the opportunity to conduct the study on “Best Practices on Sustainable Financial Services of Farmer Organization Fund in Thailand”. DOAE would like to thank for the concrete cooperation of the authorities who were instrumental in achieving the project objectives particularly the Sarng Thor Noi Community Bank and Enterprise, Hua Taparn District Agricultural Extension Office, Amnart Charoen Provincial Agricultural Extension Office, Na Koh Sak Saving Community Enterprise, Hat Sumran District Agricultural Extension Office and Trang Provincial Agricultural Extension Office, as well as the Finance Division, Planning Division and Personnel Division of the Department of Agricultural Extension Head Office. The research team likes to express their sincere thanks to the management of the DOAE for approving and providing the opportunity to conduct this research for the benefit of increasing the breadth of knowledge in agricultural extension of Thailand. Prasun Kumar Das (APRACA) Michael Hamp (IFAD) iv Training Modules and Resourcebook About the Authors The authors of the country report and the five case studies in this document are the team of experienced professionals in rural and agricultural finance from Bank for Agriculture and Agricultural cooperatives (BAAC) and qualified researchers from agricultural extension programme of the Department of Agricultural Extension, Ministry of Agriculture and Cooperatives, Royal Government of Thailand. They prepared the country reports and case studies under the guidance and support of the Project Manager of ‘RuFBeP Project’ funded by International Fund for Agricultural Development (IFAD). Ms. Nicha Uaipornrungrat, Director, Office of Organization and System Development Department (Innovation) led the team of the professionals from BAAC and documented the cases on ‘Suk Samran Community Banking’, ‘Don Moo Community Banking’ and ‘Thaweesook Deposit’ scheme of BAAC. The Team of researchers from Department of Agricultural Extension was led by Dr. Surangsri Wapet who is a Senior Professional in the Department and documented the cases from ‘Sarng Thor Noi Community Bank and Enterprise’ and ‘Na Koh Sak Saving community Enterprise’. v Training Modules and Resourcebook Abbreviations AAR After Action Review ADB Asian Development Bank APRACA Asia-Pacific Rural and Agricultural Credit Association BAAC Bank for Agriculture and Agricultural Cooperatives BE Buddhist Era BOT Bank of Thailand BRI Bank Rakyat Indonesia CB Commercial Bank CDD Community Development Department CE Community Enterprise CF Community Fund CFI Community Financial Institution CBFI Community-Based Financial Institution