Microfinance in Northeast Thailand: Who Benefits and How Much?

This paper evaluated the outreach and impact of two microfinance 'villagebank' programmes targeting the poor in northeast Thailand.

One of the main findings included the role of individual levels of wealth in determining who participated in the programme and how the programme affected participants, for example:

• Prior to the prgramme intervention, participants tended to be wealthier than nonparticipants, and wealthier villagers were almost twice as likely to participate in the programme;
• Wealthier village members often became programme committee members and often used their position to borrow more than ordinary members;
• Microfinance loans positively affected many measures of household welfare for the wealthy committe members, but the impact was largely insignificant for ordinary members.

The paper makes a number of policy recommendations, in particular on the need for the protrammes to:

• Target the poor more effectively;
• Publicise the rules and purpose of the village bank programme, and;
• Introduce and enforce eligibility criteria based on wealth whilst continuing to allow villagers to self-select.

[From the author]