Thai-German Micro-Finance Linkage Project

PROJECT DURATION

January 1992 – February 2004

PROJECT DESCRIPTION

The Thai-German Micro-Finance Linkage Project derived its name from the initial concept, which sought to link rural self-help groups promoted by the Community Development Department (CDD) with the formal financial sector.

However, this approach failed due to institutional competition between the CDD and the Bank for Agriculture and Agricultural Cooperatives (BAAC). The difficulties of capacitating the self-help groups into financial intermediaries and the fact that many members of the self-help groups had already been BAAC clients. The redesigned concept started to become implemented from 1995 onwards.
From then onwards the project was geared towards expanding the range of financial services offered by BAAC for the rural population in a sustainable manner.
Operationally, the project acted in 5 fields of intervention: (1) increased savings mobilization, (2) a more customer friendly service delivery, (3) an enhanced access of farming households to off-farm micro-credit, (4) improvements in the operational efficiency of BAAC branches and (5) the promotion of an appropriate regulatory framework for BAAC.

The project operated nationwide through the bank’s head office in Bangkok. One of the major successes of the project was the dissemination of the Om Sap Thawi Choke (OSTC; save and get a chance) savings product, which was targeting the poorer sections of the rural population. One of the features of the product was a lottery conducted twice a year in the provinces. Every depositor who managed to have a minimum deposit for at least 3 months was eligible. By the end of the project there had been 2,3 million OSTC accounts all over Thailand.