Villagers in Nakhon Nayok submit loan applications to the local administration official. The government has approved more money for Village Funds to stimulate the economy. Tawatchai Kemgumnerd
The government yesterday approved 1.56 billion baht to finance the Village Fund scheme for 1,562 grade A villages, which have efficient and prudent funding management.
Minister Suwaphan Tanyuvardhana from the Prime Minister's Office said additional funding approved yesterday by the National Village and Urban Community Fund Committee would help boost the country's economy in the last quarter.
He said the committee yesterday also approved four new Village Funds: one in Nonthaburi, one in Nakhon Pathom and two in Bangkok. That raises the total number of Village Funds to 79,574.
The Village Fund scheme was established 15 years ago with the aim of serving as a microcredit lender to people in rural areas, similar to the Grameen Bank in Bangladesh. The scheme is intended to widen villagers' access to financial resources to help them avoid resorting to loan sharks.
The funds use a self-governing concept under which members must ensure that borrowers pay their debts to sustain money put into the funds.
Village Funds, however, have been criticised over loopholes allowing for corruption and the injection of money into non-productive projects.
The government has so far approved pumping a combined 180 billion baht into Village Funds across the country.
But while the government continues to inject new capital into the scheme, the amount is still small compared with the large number of rural citizens.
Mr Suwaphan said the government is reclassifying 10,937 problematic villages that have not yet received money from the present government.
These villages are rated below grade B due to accounting and management issues.
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