Published: 31/08/2010

Thailand Post offices nationwide could be transformed into microfinance centres as part of the government's bid to extend financial services to lower-income groups, said Finance Minister Korn Chatikavanij.

The postal service's 1,200 branches and tens of thousands of staff nationwide could serve as a broad distribution channel for rural communities, he said.

If approved by the Bank of Thailand, the Thailand Post could join with state banks such as the Government Savings Bank and the Bank for Agriculture and Agricultural Co-operatives in promoting microfinance programmes.

The GSB for the past several years has offered the People's Bank programme as a funding source for urban residents by offering small loans to support entrepreneurial activities. The BAAC meanwhile is championing community bank schemes where villagers play a direct role in vetting and approving loan requests by residents.

The Finance Ministry hopes that expanding financial services to the poor will help reduce dependence on underground lenders and loan sharks, which often results in massive social disruption and household debt due to usurious rates of interest.

Mr Korn said simply providing financial access to the poor was not enough, and that help is also needed in terms of knowledge and financial management.

The GSB and the BAAC would collaborate to establish "local financial advisers" to offer assistance to villagers about basic household financial planning and accounting, he said.

Mr Korn said in the future, the government could tap underground lenders themselves to play a formal role in providing microfinancing to villagers by acting as agents for state banks.

Source: Bangkok Post