Adjustment of strategies used by community financial institutions during the period of economic downturn
2000
Aree Cheamuangphan | Narongrith Saengjun | Kavintra Vichalai (Maejo Univ., Chaing Mai (Thailand). Faculty of Agricultura Business. Dept. of Agricultural Economic and Co-operative)
In the past, it was realized that Thailand's economy was developed to a level with an average growth rate of 7.8 percent per year. One of the factors that made it successful was the distribution of capital from foregin countries to Thailand resulted in the increase in purchasing power in the economic system. However, in the last three years, development was found to be in a slower pace after losses in the balance of current account which was found to be in the highest rate while foreign debt was as high as 90,000 million US dollar. Furthermore, by the end of 1999 Thai economy slumped into a very serious setback. To obtain loan provided by the International Monetary Fund (IMF), the government had to make an agreement on conditions made by this organization which led to the closing down of some commercial banks and financial institutions. Though these institutions have been facing with many problems, this setback had little or no effect on community financial institutions or "saving groups" founded by villagers themselves. However, it was found from the conclusion conducted by this study that saving groups still had two indirect problems which were; (1) a decrease in the number of members and capital and (2) non-performing loans. To resolve these problems, these monetary institutions adjusted their strategies by means of; (1) the postopnement of debt repayment (2) providing their members with training courses suitable for their professions and (3) seeking partnership with other community business organizations with an aim to distribute goods. After these practices had been adopted, the institutions were in a position to help their members to lead a better life in spite of these difficult circumstances.
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