Thailand

Case Studies Bank for Agriculture and Agricultural Cooperatives (BAAC) Gold Savings by Jigsaw Development in Thailand The Government Savings Bank of Thailand Strengthening savings in a state bank: product and promotion at BAAC

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General Approach to Regulating

Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland

Case Studies

Bank for Agriculture and Agricultural Cooperatives (BAAC)
Success in Rural Savings: How one Donor Led the Way (Donor Good Practice Case Study No. 1), 2003 (76 KB, PDF)
By: Ruth Goodwin-Groen

In this paper, the author cites the example of Deutsche Gesellschaft fur Zusammenarbeit's (GTZ) technical support to Bank for Agriculture and Agricultural Cooperatives (BAAC) to develop and deliver saving services to 2.3 million rural poor Thais.

The paper finds the following as key features for project success:

• Properly evaluate institutions to ensure provision of safe and secure saving services;
• Design products that match consumer requirements using careful market research;
• Find ways for the donor and the local institution to share costs;
• Allow sufficient time to do it right.

The paper concludes by stating that in spite of long gestation period of 24 months prior to the launch of product and an interim change in the basic product design (based on BAAC feedback), GTZ's modest but strategic investment in technical assistance achieved its mission.

Strengthening savings in a state bank: product and promotion at BAAC

In 1995, the Bank of Agriculture and Agricultural Development of Thailand developed a liquid passbook product with a minimum opening balance of just over US $1. By the end of 2002, BAAC held more than 2.3 million of these accounts that represented nearly a quarter of its 9.5 million deposit accounts and ten percent of its volume of deposits. This one-page case describes the product development and promotion process that produced these results.

This case study can be found in Savings Operations for the Poor: An Operational Guide, edited by Madeline Hirschland, forthcoming from Kumarian Press (1294 Blue Hills Avenue, Bloomfield, CT 06002

Om Sap Thawisin Savings Card Deposits by Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand (612 KB, PDF)
Summarized from:. "A Review of Commitment Savings Products in Developing Countries", 2003
By: Nava, Ashraf, Nathalie Gons, Dean S. Karlan, and Wesley Yin

BAAC's lottery savings cards is a type of deposit that is payable at sight upon request. A client may purchase as many cards as s/he chooses, each for a price of 500 baht. The cards mature after three years. At the end of the maturity period, a client may withdraw his/her savings and interest earned. BAAC's lottery savings cards can act as a deadline for bonuses. Clients have a chance to win prizes once every 3 months (12 times during the life of the card). Awards are based on two draws from the last three digits of the card serial numbers so the more cards, the higher one's chance at winning.

Gold Savings by Jigsaw Development in Thailand (612 KB, PDF)
Summarized from:. "A Review of Commitment Savings Products in Developing Countries', 2003
By: Nava, Ashraf, Nathalie Gons, Dean S. Karlan, and Wesley Yin

"Cash savings is only for the few. They cannot control the presence of cash. It's a new but promising product for us." -J. Melhede, Jigsaw Development. Jigsaw Development is a private limited company with limited outreach in peri-urban areas of Thailand. The quote above highlights the demand perceived by Jigsaw's president that people look for savings facilities with commitment features. Jigsaw Development's Gold Savings account, targeted to microentrepreneurs, was introduced in 2003 and numbers 50 accounts to date. "Clients use gold as a means of savings." Clients buy gold with a 20 percent downpayment, and Jigsaw lends them the remaining 80 percent. They make daily repayments over a period of 35-70 days. Jigsaw charges an interest rate of approximately 20 percent for a gold loan. Jigsaw has deposit collectors.

The Government Savings Bank of Thailand
From the paper: The Provision of Microfinance Services by Savings Banks: Selected Experiences from Africa, Asia and Latin America, 2004, pages 60-63
By: Hugues Kamewe and Antonique Koning

With total assets of nearly US$13,000 million, the Government Savings Bank of Thailand (GSB) is the fifth largest bank in Thailand. The People Bank does not only extend loans but also promotes savings habits and collects savings from the customers. The savings habits of the individual, reflected by both the deposited amount and the frequency of deposits is taken into account for eligibility for the micro-loan. The savings products offered by GSB are classified under standard and special savings accounts. The first one accrues interest on a daily basis and is exempt from tax. The savings account can be used as collateral for a loan or an overdraft. Not only is it possible to transfer funds from the savings account to a current account, but also payments of utility bills can be deducted against the savings account. The particularity of the special savings account is that each deposit or withdrawal must be of BHT 1,000 minimum (US$23), except for the withdrawal of interest. Second and next withdrawals are subject to a fee of 1% of the transaction amount but not less than BHT 500 each (US$12).

See also:

Savings Mobilization Strategies: Lessons From Four Experiences (BAAC), CGAP

Savings in the Context of Microfinance - Lessons Learned from Six Deposit-Taking Institutions. 1998, Sylvia Wisniwski

Where are they now? (Thailand - BAAC). 2006, Ruth Goodwin-Groen