How do we

close macro gap

with micro niche
management ?
Thailand practice:
Boost domestic economy through grass roots development

Conceptual Framework:
Boost domestic economy
through grass roots development
Opportunity Enrichment
Financial Measures
Measures

Creating income Reducing expenditure  Village Fund

 People’s Bank
 One Tambon One  Debt Suspension for
Product ( OTOP ) Farmers project  SMEs Bank
 Nation-wide health care: 30-
 Increase minimum  Asset capitalization
baht medical care system
wage rate  Fix It Centre project  SML budget and CEO budget
 Increase government  Promotion of the use of  OKMD & TCDC
salary base twice alterative energy sources,
 Extend new export natural gas, bio-diesel and  FTA
markets gasohol
HOW did WE DO IT ?
Programmes: Asset
One Tambon One Capitalization
Product (OTOP)
Fix It Centre
Village and Urban
Community Fund Tax
collection
Village and Community
Development Fund OKMD
(SML)
TCDC
3-Year Debt Suspension
Other approaches
People’s Bank and results
One Tambon One Product (OTOP)
Conceptual framework
Market-driven
Objectives: product model
for the masses
 Develop at least one product that truly reflects local knowledge and skills
 Encourage using local raw materials
 Transform local skills, resources into products suitable for urban and
global market
 Provide an alternative source of non-farm income

 Food  5 star ( 90 - 100 ) 539 products

 Beverage  4 star ( 70 - 89 ) 2,177 products
 Clothing & apparel  3 star ( 50 - 69 ) 4,734 products
 Appliance & home furnishing  2 star ( 30 - 49 ) 15,677 products
 Artificial art & souvenir  1 star ( below 30 ) 3,433 products
 Non-food ( herbal products )

OTOP Product OTOP City

Registered Training + Champion Exhibition

37,754 product
Products * development 26,570 7,800
products products
( * as of Sep 2004 )  Trainers
 Villagers

Source: Community Development Department

One Tambon One Product (OTOP)
Performances
Total sales of OTOP Sales of OTOP products (million Baht)
Year
products (2003 – 2006) Local Overseas Total

Systematic approach of 2001 ( Pre project ) - - 245.00

exporting OTOP from 2002 ( Jan 02 - Sep 02 ) - - 16,714.85

rural to urban and global 2003 ( Oct 02 - Sep 03 ) 25,196.63 8,080.33 33,276.96

market 2004 ( Oct 03 - Sep 04 ) 35,872.16 10,404.77 46,276.93

2005 ( Oct 04 - Sep 05 ) 42,461.86 12,643.00 55,104.86
Registered OTOP 2006 (Oct 05 - Jun 06) - - 51,223.48
37,754 products Total (2001 - 2006) - - 202,842.08
Of products
Products Non - food
No. % Artificial art & ( herbal products )
souvenir
Food 9,743 27.70
8.4% 6.2% Food
Beverage 2,540 7.22 27.7%
Clothing & apparel 8,538 24.27
Appliance & home Appliance & home
9,208 26.17
furnishing furnishing Beverage
Artificial art & 26.2% 7.2%
2,954 8.40
souvenir
Non - food Clothing & apparel
2,196 6.24
( herbal products ) 24.3%
Source: Community Development Department
Village and urban community funds
Conceptual framework:
Objectives:
Similar to Grameen Bank but with the use of local
social sanction to guard against bad loans
 Established as a micro-credit scheme

4 steps to get loan approval :  Provide a revolving fund of one million

baht to each of more than 70,000
villages or urban communities
Bank  Strengthen self-sustainability and
stimulate grassroots economy
③ Approved
 Increase household income,
Village fund
member’s
Village fund committee ④ Approval
consideration 
employment, upgrade occupation
Rate each villages in terms of
9 - 15 persons
accounts performance and management systems
Not approved
Loan Criteria : ②
Credit Line : ≤ 20,000 Baht Loan Contractual
In case : > 20,001 but < 50,000 application agreement
Ask for approvals from committees

①
Villagers Review

Career investment

Source: Office of the National Village and Urban Community Fund

Village and urban community funds
5 steps to repay loans:
④ Bank ⑤ Update accounting
branch records :
Village fund at least once a month
③ committee
Village fund
accounts

② ①
Loan Evidence of Of all village fund members
Villagers ( as of December 31, 2005 ):
repayment loan repayment

NPL = 6%
Performance

Allocated fund Circulated

77,966 villages & urban communities
3 - 4 rounds
282,505 million Baht
( * as of December 31, 2005 )

Source: Office of the National Village and Urban Community Fund

Village and urban community funds
Future plan
Upgrading Village Funds to become “Community Financial Institution ”

Several AAA Village Funds are Community Financial Institution :

consolidated to set up a Village Bank Conceptual framework
with only one management
committee Financial Community
Community Financial Institution Institution
could be a branch of
Government Savings Bank
Fund A Fund B Fund C
Management Committee

Village Cooperative
Savings / Deposit Lending
services services

Customers:
members & non-members

Source: Office of the National Village and Urban Community Fund

Village/Community Development Fund (SML)
Conceptual framework

Government decentralization

Village / Community Development Fund

Village / Community empowerment as an engine for poverty eradication
and creating opportunity for better quality of life

Improve quality of Create jobs Set up admin.

Budget will meet
life by allocating and generate platform and best
the demands of
budget directly to income for practices for each
each village
villages villages village

SML Criteria:
Village size Population Village Committee size Allocated budget (Baht)

S Under 500 7 - 11 200,000

M 501 - 1,000 9 - 13 250,000

L Over 1,000 13 - 15 300,000

Source: The Office of the Potential of Village and Community

Village/Community Development Fund (SML)
Procedures Villages/Communities empowerment as an
The Secretariat of the Prime
Minister (SPM)
Budget allocation
Government Savings Bank &
Bank for Agriculture and
Agricultural Cooperatives
Open and manage bank accounts for
each village / community
Create budgeting and procurement
procedures
Source: The Office of the Potential of Village and Community
engine for poverty eradication and creating
opportunity for better quality of life
 Monitor and report back to the
SPM
 Select and submit Villages /
communities
Department of
Villages / Communities Provincial
Administration
Set up village committee
Elect committee members who are
responsible for budget
Monitor and report the
Prioritize demands / needs in progress of the project
villages and turn into project
proposals
Progress on selected project by
working closely with local
universities / organizations
Village/Community Development Fund (SML)
Performance & Future development
2004 113,968 ( 2004 - Aug 2006 )
projects established :
1,024 Villages
259 million Baht
( as of 30 Sep 2004 )
Others 16,617 Projects
( 14.6% )
Social Welfare Infrastructure

2005
28,091 Projects 49,873 Projects
( 24.6% ) ( 43.8% )
38,360 Villages
9,000 million Baht
( as of 30 Sep 2005 )

Income / Job Creation Agricultural Development

2006
10,606 Projects ( 9.3% ) 8,781 Projects ( 7.7% )

37,938 Villages 2007 Roadmap:

8,930.85 million Baht
( as of 18 Aug 2005 )
 Extend to 77,472 villages throughout the country
 File for another budget of 19,100 million Baht for 79,830
villages in 2007

Total
 Development and management of ICT for SML through the
development of IT hardware, software, and on-line services
e.g. Website and Call Centre
76,298 Villages  Co-operate with local universities to establish Knowledge

17,930.85 million Baht

( as of 18 Aug 2005 )

Transfer Management Centre
Introduce SML Mobile Unit for creating prototype of knowledge
transfer process

Source: The Office of the Potential of Village and Community

Three-year Debt Suspension
Debt suspension and debt burden reduction
Operated by Bank for Agriculture and Agricultural Cooperatives (BAAC)

Conceptual framework:
 Designed for small farmers whose debts ≤ 100,000 Baht
 Three-year grace period (1 Apr 2001 - 31 Mar 2004) for both interest and
principal payments

 Increase farmers’ income to have ability to repay debts after project

termination
 Help farmers focus on productive investment and upgrade production
technology through occupation rehabilitation and development program

Debt suspension Debt burden reduction

 No right to ask for new loans from BAAC  Right to borrow ≤ 100,000 Baht
 With 3% reduction in lending rate for 3-
year period

Source: Bank for Agriculture and Agricultural Cooperatives

Three-year debt suspension
Performance
1 Apr 2001 31 Mar 2004 % change BAAA reported
No. of farmers in the
the number of
project (BAAC clients) 2,309,966 1,944,029 participating
Under debt suspension
scheme 1,171,817 878,555 farmers in debt
Under debt burden
suspension
reduction scheme 1,138,149 1,065,474 scheme, as of 31
Mar 05, were
Total outstanding debts
( unit: million Baht ) 94,329 75,476 - 20% reduced to
Under debt suspension
53,039 41,006 - 23%
497,079.
scheme
Under debt burden
reduction scheme 41,290 34,470 - 17%

Overall savings
( million Baht )
31 March 2004 Increase
1 April 2001 = 14,749 in savings
= 6,410 = 8,339
Source: Bank for Agriculture and Agricultural Cooperatives
 People’s Bank
By Government Savings Bank (GSB)

Conceptual framework:
Poverty eradication in Thailand

People’s Bank, by Government Savings Bank,

introduced in 2001

Creating opportunity and access to financial sources

for small-scale entrepreneurs and vendors

Having opportunity Establishing Generating

Depending less
to establish their saving habit more jobs /
on loan sharks
own businesses incomes
 People’s Bank
By Government Savings Bank (GSB)
People Bank
① Creating opportunity and
member registration
access to financial sources
for small-scale entrepreneurs
Business Personal and
Savings consulting
services
housing loan
services
and vendors
 Savings / deposits  Business development
 Mobile unit  Business consulting Lending  People’s Bank members ONLY
 Job / skill training criteria  Age above 20
 Open bank account for at least 2 months

②
③ Loan
approval
Lending
process
1 month
maximum
Loan amount
( Baht )
Debt repayment
( months )

Under 15,000 13

Personal guarantors are required 15,001 - 30,000 25

for all approved projects.
④ Contract
signing
 2 People Bank members
 1 Government officer
30,001 – 50,000 37

50,001 – 100,000 97

monitoring ⑤
People’s Bank
By Government Savings Bank (GSB)
People Bank’s performance (as of July 2006)
Total Persons still
1,269,881 73,998
Total loan applicants in debts
1,308,832
members
Operating profit
Accumulated (before
In-collection-process
loans 29,776.85 1,150.74 provision) 238.66
loans (million Baht)
(million Baht) Jan-Jun 2006
Total
savings (million Baht)
1,866.88 Outstanding In-collection-process
(million
loans 6,806.37 loans /Outstanding 16.91
Baht)
(million Baht) loans (%)*

Future Development:
 Online banking development: client database, online banking and tracking
system between central bank and branches.
 Introduction of “ Mobile palm depositor ” as savings / deposits mobile unit
for remote areas.
 Introduction of more loan packages i.e. building loan, franchising loan, and
asset capitalization loan.
 Development of debt tracking system

Remark: * GSB explains incidence of high ratio of in-collection-process loans in People’s Bank as a result of inconvenience in
banking access during working hours. Thus, GSB responds with a new idea of bank collectors to obtain payment
from borrowers.
Government Savings Bank (GSB)

Performance (as of July 2006)

Operating Profit Accumulated loans In-collection-process

(million Baht)
5,902.62 Jan – July 2006 95,523* loans (million Baht)
12,854.36
(million Baht)

In-collection-process
Total savings
(million Baht)
582,707 Outstanding loans
(million Baht)
407,131 loans /Outstanding
loans (%)*
3.19

Loan Services:
 People’s Bank  Loans for rural development
 SMEs Loans  Loans for teachers in public
 Loans for new entrepreneurs schools
 Housing loans  etc
 Educational loans
 Loans related to Asset
Capitalization Programme

Remark: * GSB makes an average of one trillion baht worth of loans every year.
ngladesh’s Grameen Bank
Bank for the Poor
A microfinance organization that provides micro-credit to the
impoverished without requiring collateral

Grameen Bank provides the following banking services to the poor

Programme for Struggling Housing for Micro-enterprise Educational
Members (beggars) the Poor Loans Loans

Past Six Years at a Glance (2000-2005): million US$

Bad Debt Comparison
Particulars 2000 2001 2002 2003 2004 2005 ( million US$ )
40
Loan and Advances 35
(Before Provision) 244.07 229.14 231.43 287.84 345.65 439.23 30 Bad Debt

million US$
25 Bad Debt Recovery
Bad Debt 4.15 15.89 9.41 13.31 26.36 30.40 20
Bad Debt Recovery 0.20 0.82 1.81 2.28 2.55 12.95 15
10
Bad Debt/Loans * 1.7% 6.9% 4.1% 4.6% 7.6% 6.9%
5
Bad Debt 0
Recovery/Loans 0.1% 0.4% 0.8% 0.8% 0.7% 2.9%
2000 2001 2002 2003 2004 2005

Remark: * Bad debts in Grameen Bank are basically those in collection process
Source: www.grameen-info.org
Fix It Centre: Conceptual framework
Skill transfer and optimization of
capacity of machines in the villages Procedures:
through natural interaction  Select 10,000 target areas
 Publish project’s manuals and PR
Consulting on how to create  Set up village committee
value for products and  Register all tools and machines in
each area
services in each villages Community
Develop-
ment
 Arrange Fix It team ( 3-5 people )
Office of equipped with necessary tool kit for
Knowledge Department Office of each selected areas
Manage- Vocational  Go into areas ( 3-4 days / week ) to
ment and Education fix, maintain and give each village
Develop- Commission advice
ment  Statistics on tools and machines fixed
will be recorded
Department
Bureau of of Skill  Co-operate with VEC to add some
the Budget Develop- useful guides and training for Fix It
National
ment staff
Economic
and Social
 Educate and train people in villages
how to fix and maintain their tools and
Develop-
machines
ment Board
Budget support  Monitor and evaluate the success
and efficiency of the project
Fix It Centre: Conceptual framework
Goals / Objectives The program was launched on 15 August 2005
 Reduce expenses for low income households.
This leads to reduction of machinery imports First phase
and saving foreign reserves
Second phase
(15 Aug 2005 - 14 Oct 2005)
 Improve productivity for grass-root businesses extended to
by offering repair mobile services. By doing so, covered
10,000 villages
villages will be able to create greater value for 2,000 villages
their products.
 Serves as a venue for vocational students to
practice and improve their skills. NESDB will monitor and evaluate the programme

Fix It Centre: Performance

First phase (15 Aug - 14 Oct 2005)
covered 2,000 villages 56,181 people were served.
They saved
Total of 85,425 items were fixed: 854.25 * million Baht.

10,205 31,543 43,419

agricultural household cars, motor-
machines electronic cycles and 32,242 vocational students participated in
and tools appliances bicycles “Fix It Team” and earned total income of
15.16 million Baht.

Remarks: * Average price for buying new items is approximately 10,000 Baht per item.
Source: Office of Vocational Education Commission
Fix It Centre:
2nd Phase - The Development of Value Creation

Second phase
(1 Aug 2006 - 31 Oct 2006) The 2nd phase was
covered
9,800 villages + 200 units launched on 1st
in Bangkok. August 2006
2,000 Units 7,800 Units 200 Units
From
1 Phase
st + Newly selected
from CDD + Newly selected
from Bangkok = 10,000 Units
For 2nd Phase

Source: Office of Vocational Education Commission

Asset Capitalization:
How can asset capitalization help our people?
We see asset capitalization as one of the tools that will help move our
people closer to the capital to create cash flow from their own assets and to
upgrade the quality of their production processes

Type of debtors Access to capital

Well-established
Enterprises Commercial banks

SME banks
SMEs

Communities Government Saving Bank

ASSET Grass roots Village Fund

CAPITALIZATION
Source: Asset Capitalization Bureau
Asset Capitalization:
Opportunity for accessing capital
The government provided opportunities for Thais,
Land title deed especially the poor, to use different kinds of their
& land-based
documents
own assets to acquire capital in order to make their
living in the world of capitalism
Leases & hire-
purchase
contracts

Documents Formal
authorizing the
financial
use of public land
& facilities institutions CAPITAL
Intellectual
property patents

Machinery
registration
documents

Source: Asset Capitalization Bureau

Asset Capitalization:
What has been done in Thailand?

Asset Capitalization Bureau

June 2003 lasts 5 years 2004 2005 2006

Re-define Formulate MOU with Expedite Launch

Implementation
capitalized clearing house financial entitlement facilitating
system institutions issuing process measures process
assets

Players involved in the process:

government agencies, public and commercial banks, state-owned enterprises
The government and It is the critical Initially, we We created There are some Training, organized by SME
financial institutions component that encouraged understanding of the constraints due to Bank, has been provided for
together identified helps reducing NPL government banks to programme existing rules and entrepreneurs to learn how to
additional assets to risk for our partner participate in the throughout the public regulations that have prepare business plans for
be capitalized banks programme and then and relevant to revised borrowing purpose
some private banks agencies
joined in

Source: Asset Capitalization Bureau

Core Process of Asset Capitalization:
People can reach capital within 45 days!

14 days 30 days 1 day 6 months

Good loan &

Submit the debt repayment
Verify the
proposal to Award the
titlement
financial loan contract
document Enter clearing
institutions Go default
house

Financial institutions Key considerations will Banks and title issuers

will require the issuers be in (order of will try to solve
to verify the title before importance) debtors’ difficulties ‘off
accepting the  Project feasibility table’ before ending
proposals  HR management them in the clearing
 Collateral house

0%
Remark: There is no case of debtors’ difficulties resolved in clearing house system.
Until now
However, it is estimated there are a few cases handled by commercial banks off the
NO CASE
table, of around 0.5%.

Source: Asset Capitalization Bureau

 Asset Capitalization:
How many people did obtain the capital?

3,044,162
(37%)
No. of titles issued
2,214,548

1,152,902
966,472 No. of titles verified (20%)

333,720
217,005 No. of title loan proposals
314,800(54%)
198,166 No. of title loans approved (384,811 mil. Baht)
(209,416 mil. Baht) (59%)
Sep-05 Oct-05 Nov-05 Dec-05 J an-06 Feb-06 M ar-06 Apr-06 M ay-06 J un-06 J ul-06
Asset Capitalization:
The breakdown of approved loans (1January 2004 - 30 July 2006)
Loan proposal Loan approved Value
( units ) ( units ) ( million Baht )

Land title deed &

land-based 316,280 302,491 25,484
documents

Leases & hire-

purchase 7,189 2,539 1,271
contracts

Documents
authorizing the
use of public 5,190 5,114 172
land & facilities

Intellectual
property 469 64 67
patents

[ ]*
Machinery 100% 357,817
registration 4,592 4,592 50% 178,908
documents
20% 71,563

Total 333,720 314,800

[ 100%
50%
20%
384,811
205,902
98,557 ] **

Remark : * Value of approved loans on machines is divided to 3 categories - 20%, 50%, 100% of original asset value.
** Total value of approved loans in every asset is divided into 3 categories according to criteria set for machinery asset.
The Office of Knowledge Management
And Development (OKMD):
Attitude towards economic development

To maintain growth momentum at

sustainable level, Thaksin Government
assigned top priority to further develop the
country’s
State-of
Intellectual
infrastructure + Up-to-date
knowledge + -the-art
learning
facilities

Thus, Thai people will better utilize

advances in knowledge and techniques in
their work, and contribute to the creation of
a new breed of
knowledge-rich entrepreneurs
Source: The Office of Knowledge Management and Development
The Office of Knowledge Management
And Development (OKMD):
Attitude towards economic development

This new group was

empowered to create
new values by
combining
Capital Creativity
Value
Creation
+ Cultural
Asset
= Economy

We are steering our economy towards

new high-value products

Source: The Office of Knowledge Management and Development

Thailand Creative and Design Center (TCDC)

+ Creative
& Design
= New product
for new demand
Capital

 Library Services
 Seminars
 Exhibitions
 Workshops
Contribute & match  Database

Build “ design + creative knowledge ”

New generation Work united for

with creative ideas to produce new economy
new products for new demand = economy that uses idea > labor

Source: Thailand Creative and Design Center

Other Thailand approaches & results:
Supporting measures
Public housing for the poor
Baan Uae Arthorn: from 40,000 Baht up
Performance
581,354 Requests registered (as of Apr 05)
166,000 Units awarded (as of Feb 06)
14,000 Occupants already moved in (as of Feb 06)

7.1 million poor recorded (as of 2004)

Registration of the poor with some 12 million Issues

1.1 million Rai of which 326,372 Rai has been approved

Issue land titles by Provincial Land Reform Committee
(as of Jul 06)

SME Bank lending including fast From 717 SMEs (2002) to 13,433 SMEs
track with loan approval of 38.12 billion Baht (2005)

Lower costs & time saving

One stop government services Infrastructure-Construction permits
Water-Electricity-Telephone-etc.

Increase minimum wage From 165 baht in 2001 to 184 baht in 2005 in Bangkok

Sources: NESDB, Fiscal Policy Office, Agricultural Land Reform Office, SME Bank, Ministry of Labour
Other Thailand approaches & results:
Supporting measures Performance
Provincial CEO completed with authority over local police
Establish provincial CEO etc.

Local government budget accounts for more than 24.1%

Fiscal decentralization of total budget in fiscal year 2006
= 327 billion Baht (4.2% of GDP)

Develop local government Local governance using integrated planning with public
agencies participation

4 million jobs created between 2001-2005

Social security strengthening
Labourers covered under Social Insurance Scheme (SIS)
 Job security increased from 6 million (2002) to 8.2 million (2005)
 Accident insurance at 1 Baht/day Establishments under SIS from 115,984 units (2002) to 360,550
units (2005)
 Human traffic prevention Minimum employees reduced to 1 individual from Apr 1, 2002
Complaints of Thai workers going abroad (Oct 03-Sep 04): 38,110
individuals of which 24,912 individuals involving benefit claims of
over 500 million Baht

Total raise of 13%, in 2004 and 2005. Also lifting minimum salary
Increase government salary base base to 7,000 baht and adding 1,000 baht more for those whose
twice salary is lower than 10,000 baht

Source: NESDB, Fiscal Policy Office, Agricultural Land Reform Office, SME Bank, Ministry of Labour
Tax Collection:

(Unit: Million Baht)

2000 2001 2002 2003 2004 2005 2005 2006

(Oct 04 - July 05) (Oct 05 - July 06)

Bangkok 322,770 348,958 376,114 428,351 518,304 615,954 469,118 530,297

(%∆) +8.1 +7.8 +13.9 +21.0 +18.8 +13.0

Other
135,170 148,190 163,810 193,662 248,255 319,410 240,076 284,091
Provinces
(%∆) +9.6 +10.5 +18.2 +28.2 +28.7 +18.3

Remark: Excluding Excise Tax, Fiscal Year

Source: Revenue Department of Thailand
Tax Collection increased sharply since 2003

Personal % change 2001 2002 2003 2004 2005

income tax Bangkok 12.71 5.79 6.89 14.81 9.33

Other
5.13 10.05 11.07 16.19 8.26
Provinces

% change 2001 2002 2003 2004 2005 Corporate

Bangkok 0.81 13.90 24.57 23.48 23.53 income tax
Other Provinces 8.68 13.89 17.02 30.91 31.97

VAT % change 2001 2002 2003 2004 2005

revenue Bangkok 10.29 3.66 9.87 17.69 17.10

Other Provinces 16.74 8.40 22.24 27.62 33.84

Remark: Excluding Excise Tax, Fiscal Year

Source: Revenue Department of Thailand
Lower debt

External debt
Year 2000 Public debt / GDP
US$ 79,715 million Year 2000
57.0%

Year 2006 * 2006 *

US$ 57,325 million Year
41.7%
( * as of May 2006 )
( * as of May 2006 )

Sources: Bank of Thailand and Public Debt Management Office

Corporate and household debts
Corporate and household debts in commercial banks and other financial institutions, including credit card outstanding balance and corporate
bonds totalled 7.75 trillion Baht in 2005 equivalent to 109% of GDP. Combined with public debt, it reached 155% of GDP

Unit : Million Baht

Type of Debtors 2000 2005
Commercial bank credits 4,606,312 5,681,451
- Corporate loan 3,177,012 3,781,520
- Personal loan 506,316 1,022,826

Other Financial Institutions 875,290 1,514,173

- Finance Companies 220,826 162,058
- Credit Foncier Companies 3,358 877
- Government Savings Bank 65,738 340,023
- Bank for Agriculture and Agricultural Cooperatives 256,663 418,626
- Government Housing Bank 278,458 489,411
- EXIM Bank 48,144 61,401
- SME Bank 2,104 41,776

Credit Card Outstanding 32,597 143,454

(Bank and Non -bank)

Corporate bonds 209,883 487,620

Total 5,724,082 7,749,343
Corporate and Household Debts to GDP (%) 116 109
Sources: Bank of Thailand and Ministry of Finance
Household debts
Every household group experienced an increase in debt due to their rising income, low
interest rate, expansion of financial institutions’ services, and more capital accessibility from
new government measures. Household debt totalled 1.95 billion in 2004, of which 60% was
debt of highest income group which had an average income of 32,481 Baht per month.

Ratio of Household in Debt (%) 2000 2004

Poor people: Bottom 20% 65.9 73.4
Level 2 63.5 70.8
Level 3 55.5 67.4
Level 4 50.3 62.7
Rich people: Top 20% 49.6 59.5
Average 56.0 66.0

Total Household Debt (Million Baht) 2000 2004

Poor people: Bottom 20% 54,139 110,406
Level 2 82,898 131,078
Level 3 113,370 183,071
Level 4 177,500 345,205
Rich people: Top 20% 732,423 1,176,376
Total 1,160,329 1,946,136

Sources: National Statistical Office and NESDB

Household debts
In 2004, household debt averaged 90 percent of annual income of which 36.9% was
mortgage loan, 30.9% business loan, and 29.5% consumption loans including educational
loans. As a result, 81% of households had their own private property such as houses and
lands as well as increasing private assets such as cars, pick-up trucks, and other
automobiles.

Unit : Baht
Average Annual Average Debt Debt to Household
2000 Income per Household per Household Income Ratio
Poor people: Bottom20% 36,902 31,679 0.9
Level 2 58,388 43,256 0.7
Level 3 84,936 62,348 0.7
Level 4 135,037 99,129 0.7
Rich people: Top 20% 331,617 351,953 1.1
Average 145,552 124,560 0.9

Average Annual Average Debt Debt to Household

2004 Income per Household per Household Income Ratio
Poor people: Bottom 20% 50,124 50,843 1.0
Level 2 79,356 50,862 0.6
Level 3 112,702 75,517 0.7
Level 4 170,388 142,439 0.8
Rich people: Top 20% 389,772 429,565 1.1
Average 178,272 160,781 0.9

Sources: National Statistical Office and NESDB