THE IMPACT OF MICROFINANCE INSTITUTIONS ON THAI POVERTY HOUSEHOLDS

Abstract

The objective of this research article was to determine the impacts of microfinance institutions (MFIs) on Thai poverty household welfare in terms of income and expenditure. This study used secondary data from the Household Socio-Economics Survey (SES) of the National Statistical Office of 26,107 households from all Thai households across the country between 2015-2019. The fixed-effects model is used to estimate the effect in this article. The results found that 1) there is the statistically-significant negative effects of the member of microfinance institutions on poverty household income and poverty household expenditure when compare with a non-member at 0.01 significance level 2) 66.30 percent of Thai poverty households are not members of MFIs and cannot access financial services of MFIs. The policy recommendation are all of the agencies that supervise the operations of MFIs such as the Department of Community Development, Ministry of interior; the Department of Cooperative Promotion, Ministry of Agriculture and Cooperatives, including private financial institutions should focus on helping each other in a close contact from being members in the same community, should not exclude any members of the community especially the lowest-lover poor households. All members help each other to monitor use of the loan in the right purpose such as self-improvement, business improvement and promoting education for their children. The government should be integrated between all of the agencies and reduce redundancy. Distribute the target group to the poor, not let the burden of working overlap in the same group of people, and transitioning from organization that is redundant or unable to address accumulated problems into a new organization that is ready to accept more targeted members, easier access to funding, standardize technology to support the microfinance institution operations, and distributing the target group of the poverty households that not duplicated in the same group of people.