Community-Based Microfinance: An Empowering Approach Towards Poverty Alleviation and Community Self-Reliance

05 Jul 2006
Microfinance

Foreword

Several decades of extensive community-based rural development programmes undertaken by various government and non-governmental organizations in Thailand have resulted in the overall achievement of reducing poverty and improving rural well-being. Many of these community-based programmes have been initiated or generated by local communities or villagers themselves.


Experiences from these programmes have shown that people are capable of initiating and managing development activities on their own. The communities’ initiatives are better responsive to their needs and problems, while enabling rural communities to find their own suitable solutions to these problems and to become self-reliant. This has been a rational for the Royal Thai Government’s adoption of “people-centred development” as clearly outlined since the 8th National Economic and Social Development Plan to the current 9th National Plan.


One of these successful community-based development programmes is a microfinance scheme, which aims to mobilize local financial resources to help rural people solve their problems and to serve as resource for their community’s activities. This microfinance scheme has emerged as an effective medium through which credit can reach the poor. It is a key instrument for poverty alleviation efforts at the community level. In Thailand, there are several community generated microfinance projects implemented by different communities and local NGOs nationwide.

 

With this development through the years, Thailand can share their lessons learned and best practices in this area with other developing countries within the region and beyond. This publication is the product of a joint partnership of the Thailand International Development Cooperation Agency (TICA) of the Ministry of Foreign Affairs and the United Nations Development Programme (UNDP) in Thailand. The purpose of this publication is to share Thailand’s lessons learned and experiences with other developing countries and development partners within the region and beyond on microfinance management at the community level. It will also be an advocacy document for Thailand to showcase their best practices in this area. The preparation of this publication brought together key eminent experts, government officials and academic researchers in a long process of consultations and dialogues. The organizing members for this publication wish to express sincere appreciation to the research team, led by Ms. Walaitat Worakul, who guided the research and production of this publication.


It is hoped that this publication will be a valuable contribution from Thailand to share lessons learned and best practices, along with analytical views on key elements and options for such successful cases, with policy makers and development partners within and outside Thailand. The analysis and information from the publication can also be used as key input and as indicators for Thailand’s achievement of their MDG-Plus targets.

Contents

  • Case study 1: Klong Pia Savings Group
  • Case study 2: Puthaisong Sustainable Agriculture Network
  • Case study 3: Dok Khamtai Village Bank Network for Mutual Care
  • Case study 4: Klong Toey Cooperatives for Development Services, Ltd.
  • Conclusions and Lessons Learned
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  • Community-Based Microfinance English