The Thai Rural Credit System: Public Subsidies, Private Information, and Segmented Markets
| Autor: | Ploenpit Satsanguan, Ammar Siamwalla, Prayong Nettayarak, Nipon Poapongsakorn, Wanrak Mingmaneenakin, Chirmsak Pinthong, Yuavares Tubpun |
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| Rok vydání: | 1990 |
| Předmět: | |
| Zdroj: | The World Bank Economic Review. 4:271-295 |
| ISSN: | 1564-698X 0258-6770 |
| DOI: | 10.1093/wber/4.3.271 |
| Popis: | Thailand has sought to increase farmers' access to credit by government intervention. In 1966 it created a government agricultural bank to lend solely to farm households, and beginning in the late 1970s it required commercial banks to lend heavily in the rural sector, either directly or by making deposits in the agricultural bank. The result was an enormous expansion of credit in the rural sector. But because formal lenders were either unable or unwilling to solve the information problems involved in the broad range of rural credit transactions, the informal credit sector (wbich charged interest rates many times higher than the formal sector) continued to thrive. Using household surveys and surveys of moneylenders, this article provides a detailed analysis of the ways in which lenders in the informal sector have solved the information problems of providing credit. The authors argue that the informal sector is competitive, and that high interest rates reflect high information costs, not the scarcity of funds. This article reports on a set of investigations of the impact of Thai government policies to expand bank lending in the rural sector. Their purpose was to increase farmers' access to capital and reduce their dependence on informal lenders. Fifteen years after the principal government measures were introduced, we hope to be able to answer several questions: How has the expansion of formal sector lending affected the informal sector? Did the increase in the supply of formal credit reduce the business of informal lenders and lower interest rates in the informal market? What has been the performance of the formal credit system in terms of coverage, efficiency, and incidence? Lacking time-series data on the informal sector, we cannot give a direct answer to these questions. But we can with confidence say that the informal lenders are still very much alive. By examining the behavior of the rural credit market at the present time, we can throw an indirect light on what transpired over the last fifteen years. Our main findings are the following: * On the basis of our 1984-85 survey of households and moneylenders |
| Databáze: | OpenAIRE |
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