Miay is a member of a Whole Planet Foundation-supported Village Bank organized by Small Enterprise Development (SED) in Northeastern, Thailand. SED trains the village bank committee in management and accounting skills so that the village bank can be a relatively independent source of credit, savings and mutual aid for the members. In addition, SED provides some additional financing for group members.
Miay is connected to both the internal and external services offered through the village bank. She borrows 6000 THB ($170) from SED and also 4000 THB ($114) from within the village bank. Miay splits this total capital between fertilizer for her 1 hectare rice field and capital for her Thai silk business. While the rice she grows is for family consumption, she makes and weaves silk as an income-generating project. It can take her anywhere from 2 – 5 days to weave a 2 meter piece of Thai silk, depending on the design. She then sells each piece for 1500 THB ($43). When her children were still at university, she would send her profits to them to use for school expenses. Now they have all graduated and she uses her profits for household expenses like electricity and food and she saves the remainder with her village bank.
Miay saves about 100 THB ($2.85) each month. Her savings are kept in a group account along with all the other group members’ savings. The group’s total savings are pooled together and lent out to members of the group, like Miay, who have need for some additional capital. The village bank also charges its members interest on these internal loans. At the end of the year, the total interest collected generates a profit for the group. The profit is then paid out as dividends to the members in proportion to the amount they saved. For example, last year, Miay’s savings earned her 1500 THB ($43) in dividend payments.
Miay says what she appreciates most about the village bank is that she doesn’t have to worry about loan repayment. Technically her solidarity group and the village bank as a whole as secured her loan so they are meant to cover for her if she has a repayment problem. But also because she knows everybody in the group, they can make the terms of the loan flexible, especially for the internal loan from the village