MICROCAPITAL BRIEF: Government Savings Bank of Thailand Expands Microfinance Services in Border Areas

Government Savings Bank (GSB), a government-owned bank providing personal and corporate services in Thailand, reportedly plans to offer new microfinance products and otherwise expand services in advance of the anticipated 2015 launch of the Association of South East Asian Nations (ASEAN) Economic Community (AEC).  AEC is expected to boost cross-border trade and significantly increase provincial real estate prices. In preparation, GSB has rolled out new products targeted at the general customer base such as foreign exchange, trade finance and pre-shipment financing for exporters. Newly offered microfinance products include insurance, savings, investment and credit options aimed at low-income people in rural areas. Over the next three to five years, GSB plans to upgrade provincial branches in the border cities of Mae Sai, Udon Thani and Hat Yai into regional business centers that offer full banking services.

As of 2010, GSB reported THB 1.5 billion (USD 47.6 million) in total assets, THB 1.2 billion (USD 38.4 million) in deposits, return on assets (ROA) of 1.6 percent and return on equity (ROE) of 18.57 percent. GSB also maintains 17 million accounts and serves 63,000 community rotating credit associations with members in 80,000 villages under the government-backed Thailand Village and Urban Revolving Fund (VF) scheme. Rotating credit associations are member-managed funds to which members contribute periodically and from which one member may withdraw a lump sum each period.

By Jennifer Young, Research Associate

About Government Savings Bank
Established in 1913, Government Savings Bank (GSB) is a government-owned retail bank providing personal and corporate banking services in Thailand. Its products include savings, loans, international banking, asset management, leasing, factoring and electronic banking services. As of 2010, GSB reported THB 1.5 billion (USD 47.6 million) in total assets, THB 1.2 billion (USD 38.4 million) in deposits, return on assets (ROA) of 1.6 percent and return on equity (ROE) of 18.57 percent.

About Thailand Village and Urban Revolving Fund
Established in 2001, Thailand Village and Urban Revolving Fund (VF) is a government-backed program designed to stimulate the rural economy. It comprises 17 million accounts with government funds provided as working capital to 63,000 community rotating credit associations with members in 80,000 villages as of 2012.

Sources and Additional Resources

Bangkok Post Story: “New Microfinance Services at GSB To Assist Rural Poor”
http://www.bangkokpost.com/business/economics/315372/new-microfinance-services-at-gsb-to-assist-rural-poor

MicroCapital Story: “MICROCAPITAL BRIEF: Thailand Post Offices to Begin Offering Microfinance Services,” December 13, 2010.
https://www.microcapital.org/microcapital-brief-thailand-post-offices-to-begin-offering-microfinance-services/

MicroCapital Story: “MICROFINANCE PUBLICATION ROUND-UP: Disclosure Regimes for Responsible Financial Inclusion; The Thailand Village and Urban Revolving Fund; “Microsavings Works Much Better,” April 27, 2012.
https://www.microcapital.org/microfinance-publication-round-up-disclosure-regimes-for-responsible-financial-inclusion-the-thailand-village-and-urban-revolving-fund-microsavings-works-much-better/

MicroCapital Universe Profile: Government Savings Bank (Thailand)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Government+Savings+Bank

MicroCapital Universe Profile: Thailand Village and Urban Revolving Fund (VF)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Thailand+Village+and+Urban+Revolving+Fund

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