Does the Village Fund matter in Thailand? Evaluating the impact on incomes and spending

Jirawan Boonperm, Jonathan Haughton and Shahidur Khandker ()

Journal of Asian Economics, 2013, vol. 25, issue C, 3-16

Abstract: Launched in 2001, the Thailand Village and Urban Community Fund (VF) provided almost US$2billion – a million baht for each of Thailand's 78,000 villages and wards – to provide working capital for locally-run rotating credit associations. Using data from the Thailand Socioeconomic Surveys of 2002 and 2004, we find that VF borrowers were disproportionately poor and agricultural. A fixed effects model using a panel of rural households for these years finds that VF borrowing is associated with, on average, 3.5% more current spending, and 1.4% more income; very similar impacts are found using a propensity score matching model applied to nationwide data in 2004, which also found that VF loans are associated with the acquisition of more durable goods. By way of contrast, borrowing from the Bank for Agriculture and Agricultural Cooperatives appears to have a stronger effect on income than on expenditures. The evidence also shows that the effect on expenditure (or income) of VF borrowing is strongest at the lower quantiles, and flowed disproportionately to low-income households; in both of these senses it is “pro-poor”.

Keywords: Thailand Village Fund; Impact evaluation; Panel data; Quantile regression; Pro-poor effects (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:25:y:2013:i:c:p:3-16

DOI: 10.1016/j.asieco.2013.01.001

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