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Saving
& Credit Cooperative |
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The thrift and
credit cooperative is a type of financial institution whose
members are people having the same occupation or living in the
same community. Its purpose is to promote savings among members
and provide loan funds for productive investment. Cooperative are
registered under the Cooperative Act B.E. 2511 (1968). |
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 BACKGROUND
Present-day circumstances are such that people are
constantly faced with an increasing cost of living. Low income
people especially suffer because they never seem to earn enough to
cover their daily needs. They tend to deal with this problem by
turning to illegal moneylenders, who charge them very high rates
of interest. By so doing their indebtedness is increased even more
and the situation becomes more serious for themselves and their
families. |
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These are the people who stand to benefit from joining others,
under the principles of self help and mutual help, to deal
with these money problems. The first such cooperative in Thailand
was formed among officials of the Cooperative Promotion Department
and employees of the Bank for Agriculture and Agricultural
Cooperatives (BAAC). It was registered on 28 September 1949 under
the name Cooperative Officials' Cooperative Limited. (This is
presently known as the Cooperative of Cooperative Officials, Ltd.)
The Soon Klang Thewa Credit Union Cooperative was the first
community savings cooperative established in the slum area of the
Huay Kwang and Din Daeng districts in Bangkok on 17 July 1965. It
was not registered at the time. The first credit union to be
officially registered was the Maemoon Credit Union, Ltd. in Ubon
Ratchathani province on 1 January 1979. |
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OBJECTIVE
The thrift and credit cooperative is set up to help
deal with members' socio-economic problems. It is a type of
financial institution promoting savings as well as providing
loans, using principles of self help and mutual help.
Specifically, this cooperative's objectives are as follows :-
1. To
encourage thrift among members. To encourage the habit of savings,
the cooperative currently offers two types of savings:-
Shares. The cooperative sets that members must pay monthly shares
at rates set by themselves. These may be deducted directly from
monthly salaries. Dividends are paid to members at rates specified
according to cooperative law, without tax deductions. When
resigning from a cooperative, the member can withdraw his/her
shares.
Deposits. Both savings and fixed deposits are offered to
cooperative members. Interest on these deposits may be equal to or
higher than commercial bank rates depending on the financial
status of each cooperative.
2. To
provide loan services to members. Members' shares and deposits
comprise the loan funds made available to members in need.
Interest on these loans are usually at rates lower than that of
the prevailing market. There are currently three types of loans
available:-
Emergency loans. In crisis or emergency situations, a member may
borrow up to one half of his/her monthly income, depending on the
financial status of the cooperative. Repayment is normally made in
two installments, without collateral.
Ordinary loans. The cooperative can provide an ordinary loan up to
a maximum of one-half of a member's monthly income, again
depending on the financial status of the cooperative. These can be
between 4 to 15 times, or within the range of Baht 40,000 to
300,000. Normal repayment is from 24 to 72 installments, with one
other member acting as guarantor. The maximum amounts allowed for
emergency and ordinary loans are based on the average amount of
members' incomes.
Special loans. When the cooperative services can be made available
to members for housing and investment purposes. A member may
borrow the actual amount required for investment or to purchase
house and/or land, not exceeding the ceiling amount of between
Baht 400,000 to 1,000,000. Repayment period is between 10 to 15
years, using real property as collateral. |
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OPERATIONS
After a Thrift and Credit cooperative is formed,
members' representatives are elected to form Board of Directors to
administer cooperative operations. Elections are held at annual
general meetings.
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The Board meets at least once a month to determine
operational policies to be implemented by operations personnel.
Personnel normally include a manager, an assistant manager,
accountants, bookkeepers, etc., depending on the size and
financial situation of the cooperative.
Thrift and credit cooperative raise capital funds
through shares, deposits, reserve funds, loan funds, and fund
support or donations. |
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RIGHT AND RESPONSIBILITIES
The cooperative is owned by its members. Effective and
efficient management of the cooperative is ensured when members
exercise their rights as well as responsibilities properly.
The highest responsibility of the individual member is
attendance at the annual general meeting. The AGM gives him/her
the opportunity to protect membership rights as well as the means
to monitor cooperative operations and a fair sharing of benefits.
It is also a forum to determine general policies, elect Committee
members, and assign tasks to further benefit all the members.
Within the framework of cooperative principles, laws and
regulations and procedures, members must discuss problems
together, share ideas, and exercise the right to vote on
Committees and meeting resolutions. |
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