MICROCAPITAL BRIEF: Thailand’s Government Banks May Refinance Microloans Via Mobile Banking

Thailand’s Ministry of Finance (MOF) reportedly is considering turning to mobile banking to help reduce over-indebtedness, which has been caused by a failure “to seek support from and convince unofficial money lenders to relieve debts,” according to a quote attributed to Deputy Finance Minister Viroon Tejapaibul. “Loans will be given by the government banks directly to citizens without the involvement of private banking institutions or local creditors,” Mr. Tejapaibul added. This would allow citizens to refinance their informal debts by borrowing up to “a few thousand dollars” from government-backed lenders.

As a model, MOF is currently examining the M-Pesa mobile banking service, which is provided by Kenyan mobile network operator, Safaricom. M-Pesa allows users to make deposits, transfers and withdrawals viamobile phone. Launched in 2007, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator. As of 2011, M-Pesa reports having 15.2 million clients and 35,000 agent outlets across the country.

The only Thai microfinance institution reporting to the Microfinance Information Exchange (MIX) is Small Enterprise Development (SED) Company Limited, which has total assets of USD 1.7 million, approximately 8, 200 active borrowers, and no depositors.

By Brett Cohen, Research Associate

About M-Pesa
M-Pesa is a Kenyan mobile money service. The “M” stands for “mobile,” and “pesa” means “cash” in Swahili. Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator. As of 2011, M-Pesa reports having 15.2 million clients and 35,000 agent outlets across the country.

Sources and Additional Resources

Asia Pacific Futuregov story, “THAILAND CONSIDERS MOBILE BANKING FOR GOVT MICROFINANCE”
http://www.futuregov.asia/articles/2012/aug/04/thailand-consider-mobile-…

MicroCapital story, March 21, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Peru as a Model for Microfinance Regulation; M-Pesa Mobile Banking E-book; and Geographic Analysis of Thai Enterprise”
https://www.microcapital.org/microfinance-publication-round-up-peru-as-a-…

MicroCapital story, March 6, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Geographies of Need and Microfinance Providers in Nigeria, Role of Government in Financial Inclusion, Mobile Money Service and Poverty Reduction in Kenya”
https://www.microcapital.org/microfinance-publication-round-up-geographie…

MicroCapital Universe Profile: M-Pesa
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-P…

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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