Economic Trends Are Improving across the Globe
While there are measurable signs of economic improvement across the globe, to which Thailand has not been immune, pockets of disparity in certain regions remain. For instance, statistics indicate that the poverty rate across Thailand steadily declined during the years 1988 to 2008, dropping from 33.8% to 9.0%. Nevertheless, the poverty rate remains high for those living in the northeast region of the country as well as among children and the elderly. Income disparity also continues to be unacceptably high, with more than half of the total household income in the hands of 20% of the families. The government of Thailand is committed to creating strategies to lift the economic status of all citizens and believes the key solution lies in a stronger microfinance infrastructure that offers a rich menu of service options accessible to all, regardless of where they live and what their background is.
Sowing the Seeds of Economic Development
Economists observed that levels of poverty and income disparity rates are tightly linked to economic development. In central Thailand and the Bangkok areas, for instance, where there is economic development and higher per capita income, the poverty rate is lower. In the northeast, particularly, but also in the south, where per capita income is lower, poverty is higher. Obviously, there is a causal relationship. These regions suffer from other deficiencies as well which contribute to intergenerational poverty, such as high school dropout rates and poor school attendance.
The data also indicates that most of the impoverished are working primarily in the agriculture sector and that among the poor, 90% live in rural communities. Therefore, it is clear that Thailand’s poor are surrounded by an environment that does not nurture opportunities for self-improvement. To this end, the government wants to focus on moving people out from low-paying agricultural jobs and into employment with livable wages.
Strengthening microfinance systems as a way to combat poverty is based on the premise that access to financial services can improve economic condition. Accessibility is key to this premise: financial opportunities must be available to nurture entrepreneurship and small businesses, which are the building blocks of economic recovery across the world, especially in developing nations. Geopolitical conditions often limit people’s movement within countries, regions, even cities. Any opportunity to start a small business, or get a microenterprise off the ground can be the single most instrumental tool for personal empowerment and full participation in society.
Thailand Government Understands that Success Requires Access
For these reasons, the Thailand government is focusing on building up its microfinance platform to include key components such as: (a) access by all households to a savings account and consumer loans; (b) checking accounts with overdraft protection; (c) credit and debit cards and access to ATMs; (d) electronic banking; (e) payment programs; (f) insurance, including life, medical, and crop; and (g) pension plans. At the same time, the government will ensure that financial institutions are reliable, consumer friendly, fiscally sound, transparent and meet industry standards. Any opportunity for multiple-service institutions is preferred, whereby a citizen can physically or digitally enter a single institution and access a full menu of microfinance programs.
Statistics from other nations prove that where there is access to capital, bright ideas can flourish, small businesses can open and grow. New businesses mean new jobs, decent wages, improved infrastructure, more and better schools and hospitals, and a decline in poverty rates. Microfinance is not an overnight panacea, but it is the only way to long-term economic recovery for everyone.