27 October, 2008
Why is KIVA not in Thailand?
There are several reasons why KIVA is not active in Thailand. After discussing this issue with KIVA’s staff responsible for South-East Asia, we can provide the following two reasons why:
1. Thailand is not KIVA’s immediate focus. In terms of numbers, Thailand’s microfinance industry is small. Neighbouring countries, such as Vietnam and Cambodia, have a much more developed microfinance sector and provide much greater opportunities for KIVA to expand. We were told by KIVA reps that Thailand may become a focus sometime in 2009 once they have successfully expanded into other regions first.
KIVA has specific criteria in order to become a partner with them. This includes having a minimum of 1000 clients. In Thailand, there are probably only two non-governmental agencies who would qualify. Generally speaking most microfinance projects in Thailand number between 100-500 members.
2. The second important issue is the Thai legal system. Any loan originating from outside Thailand is subject to a 15% withholding tax. This includes loans with 0% interest as in the case with KIVA. As a result, a “free” loan because quite costly.
Several organizations are interested in developing partnerships with KIVA. Hopefully with time, it will be possible.