An empirical analysis of Thai village funds and saving groups’ financial performance

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Microfinance institutions (MFIs) play an important role in enabling poor households to escape poverty. MFIs cannot help borrowers if their own performance is poor. This study evaluates financial performance of Village Funds (VFs) and Saving Groups for Production (SGPs) to determine how well the MFIs are performing financially and how to improve the institutions’ future performances. The study evaluates MFIs’ performance, including MFI characteristics, outreach, productivity, financial structure and financial performance. Data are collected from the annual reports of MFIs between 2014 and 2016. VF and SGP annual reports were collected by the Government Savings Bank between 2014 and 2016. Data are analyzed using descriptive statistics, such as means, to compare the VFs’ and SGPs’ performance. The result shows that SGPs are bigger than VFs in terms of the average number of members and borrowers. However, VFs provide more loans than SGPs to poorer clients. In terms of loan management, SGP staff are more efficient than VF staff. SGPs’ profits are significantly higher than VFs’ profits. In the context of financial structure, SGPs are funded through member deposits, while VFs receive government subsidies. The results indicate that both VFs and SGPs are profitable and financially sustainable.

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    • Table 1. Institutional characteristics, outreach, productivity, and financial performance measurement indicators and ratios
    • Table 2. Institutional characteristics, outreach and productivity of Thai VFs and SGPs (mean values from 2014 to 2016)
    • Table 3. Comparison of Thai MFIs’ financial structures (mean values from 2014 to 2016)
    • Table 4. A comparison of Thai MFIs’ financial performance (mean values from 2014 to 2016)
    • Conceptualization
      Wittawat Hemtanon, Christopher Gan
    • Data curation
      Wittawat Hemtanon
    • Formal Analysis
      Wittawat Hemtanon
    • Investigation
      Wittawat Hemtanon
    • Methodology
      Wittawat Hemtanon
    • Software
      Wittawat Hemtanon
    • Validation
      Wittawat Hemtanon, Christopher Gan
    • Writing – original draft
      Wittawat Hemtanon
    • Writing – review & editing
      Wittawat Hemtanon, Christopher Gan
    • Supervision
      Christopher Gan