Microfinance scheme provides hope Bangkok Post: 5 Apr 2011 Vendors, motorcycle taxis reduced to tears with access to loansMotorcycle taxis and cabbies are indispensable in Bangkok, as most passengers rely on them to venture through the small, zigzagging inner lanes known as sois. And with the hot season heating up now, their job of plying the packed Bangkok streets all day long is only becoming even more torturous.
Taxi driving has long been an occupation for rural villagers who come to Bangkok, as it is a way for those largely shut out of the job market to send money back home.
It used to be lucrative, but now most drivers find themselves earning the equivalent of a minimum wage at best, and that only if they drive 12-hour shifts.
Each driver must earn at least 1,000 baht a day to meet the costs of petrol, usually 300 baht, and the 700-800 baht daily rental.
"The cars will never be our own. And if we cannot earn more, then it's the same as if we're just driving to cover our basic living," said Thaveesak Thammachareon, a rookie cab driver.Bangkok has 100,000 registered taxicabs, and these may be used by 200,000 drivers. Cab drivers, motorcycle taxi drivers and vendors have been targeted by the government's new Pracha Wiwat micro-lending scheme undertaken through state-owned banks such as the Government Savings Bank (GSB), the Small and Medium Enterprise Development Bank, the Islamic Bank of Thailand and the Bank for Agriculture and Agricultural Co-operatives.
The programme was launched in February, and many of these drivers and vendors have since formed semi-savings and loan co-operatives.
With little fanfare yesterday, it was the vendors' turn to register for the scheme in a ceremony presided over by Finance Minister Korn Chatikavanij and Bangkok Governor M.R. Sukhumbhand Paribatra, two key members of the coalition led by the Democrat Party.
Cabbies and motorcycle taxi drivers showed up to give support, and there were smiles all around.
Each motorbike taxi driver is entitled to 40,000 baht worth of loans that must be repaid within 11 months. Chuchai Malaithong has formed a 10-member group with his friends who work in the Charoen Krung area to secure loans totalling 400,000 baht, providing mutual guarantees for one another.
The loans carry 6% annual interest, much less than the 7% monthly interest Mr Chuchai now pays to a leasing company.The members must open mutual savings and lending accounts to receive the loans and deposit enough of their income each day to repay them and accumulate some savings.
"Each of us uses the money differently _ some might pay for their motorcycles, some might repay loan sharks," said Mr Chuchai.He said they will all look after each other and make sure every loan is repaid.
"We've known each other a long time," he added.
As for taxi cabs, a survey by the University of the Thai Chamber of Commerce conducted in Greater Bangkok in February showed 85% of 1,200 driver households carry average debt of 150,000 baht with average monthly payments of 7,500 baht.
Of that amount, 58% is owed to banks and 42% to loan sharks.
Puvanart Ittimana, manager of the GSB's Charoen Krung branch, said the bank will ensure borrowers under the scheme set aside money for savings on a daily basis so that a savings pool can be created by year-end.
At yesterday's ceremony, emotions ran high when Mr Korn distributed aprons to the vendors, who could not hold back their tears of appreciation.
The Bangkok Metropolitan Administration also announced 150 new pavement venues for the vendors, accommodating an estimated 2,000 of them, provided they register and keep the spaces clean.
Mr Korn said a similar programme will be extended to 11 other provinces next month.
Microfinance expert Sukanda Lewis added: "The key to assessing such a programme is whether the social collateral and social ties of the people are sustainable. We cannot tell now, as the scheme has only just been introduced."
http://www.bangkokpost.com/business/economics/230341/microfinance-scheme-provides-hope
Search Option
Recent Posts
Todays Birthdays
