Impacts of Microfinance Strategies on the Economic Changes of Small Farmers in Northern Thailand: A Case Study

Abstract

The Bank for Agriculture and Agricultural Co-operatives (BAAC) has been implementing new development strategies in relation to their changing role towards empowering the rural poor through the microfinance schemes. In this connection the study was undertaking to assess the impacts of the microfinance strategies (MFS) of BAAC on the economic changes experienced by their clients who are the small farmers. The results of the study indicated that credit, insurance, debt suspension and debt burden reduction were the most effective strategies that the small farmers found useful to change their economic condition. This study also showed that the factors associated with the loan repayment capabilities of the farm households included the loan repayment before participating in the MFS, the duration of the enterprise engagement, and duration of being BAAC clients. While the factors associated with the loan repayment capabilities of the community enterprise households included the amount of loan, duration of being BAAC clients and income before participating in the MFS. Most of the clients however, perceived a high degree of benefits which they gained from the implementation of the MFS.