Asian Development Bank (ADB) and the Finance Ministry signed a technical assistance letter today, to improve access to financial services in Thailand, such as microfinance, remittances, micropensions and mobile banking.
Under the US$1.5 million grant, a strategic framework for financial inclusion would be developed.
“Although Thailand has made significant strides in reducing poverty, disparities still exist when it comes to accessing the full range of financial services. ADB is committed to supporting Thailand in laying a strong foundation for financial inclusion,” said Craig Steffensen, country director of ADB’s Thailand Resident Mission.
The grant from the Japan Fund for Poverty Reduction will be administered by ADB and implemented over a period of three years, starting from February 2012. Fiscal Policy Office will be the executing agency.
It is estimated that less than half of the country’s low-income households make use of borrowing services. More than a quarter do not have access to savings products.
In Thailand, one important cause of poverty and an important characteristic of inequality is lack of access to a variety of financial services. Recent figures show only 38 per cent of low-income Thai families have used one or more financial services, while another 16 per cent do not use financial services at all. By comparison, 80 per cent of middle- to high-income families use three or more financial services.
The project team will assess supply and demand for microfinancial products, including any gender bias in terms of access and affordability. They will also assist in drafting consumer protection legislation, help develop a campaign to advance financial literacy and recommend improvements to legal and regulatory conditions that can promote access to remittances, micropensions, mobile banking and microinsurance, which is critical to mitigating risks to the poor.