|
Thailand Rural Finance
Beginning in the late 1960s, the government gave top priority
to increasing credit availability to the agricultural sector
despite the fact that agricultural performance had been excellent
during the previous two decades. The emphasis was on providing
credit to agriculture at below market interest rates and
channeling credit to poor farmers. In 1975 the central bank
imposed a mandatory credit allocation system, under which a
required minimum of 5 percent of all outstanding bank loans were
allocated to agriculture. This quota was increased to 7 percent,
then 9 percent, and finally to 13 percent by the mid-1980s.
Moreover, all new rural and provincial branches of banks were
required to lend 60 percent of their local deposits in the area
served by the branch, with one-third of that amount reserved for
farmers.
In 1966 the government established the Bank for Agriculture
and Agriculture Cooperatives to supply credit for the development
of the agricultural sector. In the 1980s, it became the most
important single source of credit for farmers, and it had a wide
coverage of 62 branches and 514 field units located throughout
the country; more than 2 million farm families were reached
directly and indirectly via the cooperatives and farmers
associations. Noninstitutional sources, such as agriculture and
savings cooperatives, supplied 50 percent of agricultural credit,
and commercial banks and the agricultural banks each supplied 25
percent. Finance for nonagricultural activities in the rural
sector, which provided 50 percent of rural income, was largely
neglected.
Data as of September 1987
|
