Village boasts success of fund, says very few NPLs

Up north, 61-year-old grocery-store owner Wandee Prasao, also served as Tambon San Khamphaeng’s Moo 3 village fund head for 12 years. 

She said the fund had many loan applications for various purposes – business investments, car purchases or even social outing expenses – and they repaid the fund at six per cent interest, a lot cheaper than finance companies.

“I myself borrow Bt15,000 a year from the fund to pay for a grocery business and I repay it at Bt1,250 a month, plus some interest. My daughter also borrows Bt5,000 a year,” she said, explaining the loan criteria wasn’t so strict because people knew or were related to each other and debt collection was easy. As long as debtors paid their dues, the fund committee would allow them to borrow in the next year, she said. Her village had no lawsuits or debt-defaulting people because the village set a tough rule that those who fell behind the debt-repayment due date would be fined at 50 satang per day.

Wandee said she had applied for membership in the Women Empowerment Funds as she was entitled to do so and hoped to get a loan from it. 

In Ubon Ratchathani’s Muang district, the Tambon Nongkhon subdistrict had 15 village funds totalling Bt15 million. This subdistrict was in the news in 2010 when Thung Khun Yai (Moo 3) villagers filed a police complaint against the village fund head Sakhon Laodarun for embezzling Bt720,000 in 2006-2009 for personal use. The case ended after court arbitration led to Sakhon’s repaying the fund at Bt100,000 a year and Sakhon remains in his hometown.

Tambon Nongkhon Administrative Organisation permanent secretary Boontham Wongsiri said the 15 villages now had no non-performance loans, except for cases of people falling behind in debt repayments; but fund committees could pressure debtors or guarantors for repayments.

Most people didn’t know of or could not remember Sakhon’s case, if they weren’t reminded or told about it, he said. Sakhon still delivered eggs to shops as usual while the village fund’s new committee continued to perform its duty and people applied for loans. He said most loan applicants borrowed money from the fund to pay family expenses or repay other short-term loans.

“I am a member of the Ban Cheuk [Moo 5] village fund in Pibul Mangsahan district and I borrow from it every year to support my livestock development and I never miss a repayment. Of the fund’s 180 members, 100 persons borrowed for their own use while the remaining 80 let fellow villagers, who often were those who signed the loan contract as guarantors, use their money-borrowing rights. 

“The fund set a loan limit of Bt30,000 per member,” he said. “No one has intentionally avoided repaying the debt so far, only a few people fall behind in repayment instalments, but they too finally repay everything,” he said.

Boontham opined that it made no difference if this fund existed or not, because only a small number of people used the money for vocational investment, while others spent it on personal use.