Financial Services for Poor Farmers in Thailand: The Case of the Bank for Agriculture and Agricultural Cooperatives (BAAC)

Mokbul Morshed Ahmad and Nguyen The Manh

No 22121, Euricse Working Papers from Euricse (European Research Institute on Cooperative and Social Enterprises)

Abstract: Lack of credit for farming is one of the main obstacles that poor Thai farmers face. Most agricultural credits from commercial banks are given to large agricultural businesses thus leaving out poor farmers who consequently have to borrow from informal sources with high interest rates. The Bank for Agriculture and Agricultural Cooperatives (BAAC), founded in 1966, provides financial assistance and development support for farmers, small business owners and community organizations in rural areas. Its mission is to alleviate farmers’ difficulties caused by debt obligations and low commodity prices and its major achievement is the informal loan reduction. However, BAAC faces some problems, including poor service quality, limited number of service locations that cause lack of access to the poor, populist policies, corruption by politicians, increasing number of non-performing loan. The major suggestions to address these problems are to enhance professional management of the bank, making it more accessible to poor farmers particularly in the remote and disadvantaged areas of the country. The results of this paper are drawn based on secondary data and interviews with some senior bank managers and experts.

Keywords: Credit; Poor farmers; Bank for Agriculture and Agricultural Cooperatives; Financial services; Thailand (search for similar items in EconPapers)
JEL-codes: G01 G21 G32 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-agr, nep-hme, nep-mfd and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpeu:22121

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