The purpose of the synthesis report is to assist the Royal Thai Government (RTG) and market players to a deliver a portfolio of financial services to the excluded and underserved adult population in a way that improves welfare, delivers value to customers and grows financial intermediation in the economy.
The 2013 FinScope consumer survey found that 74% of the adult population have a bank account, 23% use other formal financial services and a further 1% use informal financial services only. This leaves only 1% of the adult population that is not using financial services of any type. The high level of access can be attributed to the deliberate policies pursued by the Royal Government of Thailand over the years to extend financial services to the underserved and unserved population. These policies have been largely government led and government financed with the commercial sector playing a relatively minor role in providing access to credit and insurance, while taking the lead in the provision of savings and remittances.
The result is state-provided, community-based and commercial financial services providers in Thailand are already more integrated in the provision of financial services to the low-income population than in comparable countries. Further a large majority of financial services provision relies on community involvement. Community based financial institutions (CBFIs) and other community-based providers of financial services rely on members from the community to administer the operations.
The success of this type of financial provision (among others for the design of products and credit screening) relies to a great extent on the social capital built up within the communities. The Thai context, demonstrated by high levels of current satisfaction with community based provision, provides the required conditions to effectively administer these types of operations. This is largely attributed to the fact that these initiatives build on informal safety nets that are provided by friends, family and the community; as evidenced by the FinScope survey and qualitative research.
The approach proposed in this paper is to build on the current model, so that it can evolve to meet the need for more supervised financial services, a reduction in cost and an improvement in the quality of the services.