121 | 22 Financial services for poor farmers in Thailand: the case of the bank for agriculture and agricultural cooperatives (BAAC)

Lack of credit for farming is one of the main obstacles that poor Thai farmers face. Most agricultural credits from commercial banks are given to large agricultural businesses thus leaving out poor farmers who consequently have to borrow from informal sources with high interest rates. The Bank for Agriculture and Agricultural Cooperatives (BAAC), founded in 1966, provides financial assistance and development support for farmers, small business owners and community organizations in rural areas. Its mission is to alleviate farmers’ difficulties caused by debt obligations and low commodity prices and its major achievement is the informal loan reduction. However, BAAC faces some problems, including poor service quality, limited number of service locations that cause lack of access to the poor, populist policies, corruption by politicians, increasing number of non-performing loan. The major suggestions to address these problems are to enhance professional management of the bank, making it more accessible to poor farmers particularly in the remote and disadvantaged areas of the country. The results of this paper are drawn based on secondary data and interviews with some senior bank managers and experts.