Microlending – Thai style!

Despite what people say, we think the impact of the village fund that Thaksin implemented years ago can already be seen with the growth in each and every region outside of Bangkok, the expansion of Tesco’s, BigC’s, 7-11s, motorcycle sales, pick-up sales, consumer goods and electronics in the past 10 years is evidence of it, and when combined with the increase in agricultural prices there’s no surprise that the upcountry regions are booming. Its been great for business and several of the listed entities on the market, yes its a way of buying votes but companies are benefiting, GDP keeps growing, expansion continues, however our main fear is default but when this will rear its ugly head we don’t know.

THERE are an estimated 120,000 microfinance initiatives worldwide but Thailand’s “Village and Urban Revolving Fund” lends more money to more people than any other. The scheme’s outstanding loan portfolio totalled $4.9 billion in 2011; the number of active borrowers that year stood at 8.5m. Those numbers are swelling. Yingluck Shinawatra, the Thai prime minister (pictured above), announced plans late last year to inject $2.6 billion in additional capital into a network of nearly 80,000 village banks, which her brother, Thaksin Shinawatra, who was prime minister between 2001 and 2006, created with a stroke of a pen ten years ago.

Source: The Economist

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