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Topics of Discussion

Topics of Discussion. About BAAC Historical Background Structure and Service Network Products and Services Operating Funds BAAC’s operations as of 31 March 2010 Financing microenterprises. Vision.

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Topics of Discussion

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  1. Topics of Discussion About BAAC Historical Background Structure and Service Network Products and Services Operating Funds BAAC’s operations as of 31 March 2010 Financing microenterprises

  2. Vision • “To be a secured rural development bank with modern managerial technology focusing on the uplift of small-scale farmer’s quality of life””

  3. Mission 1. To render integrated credit services to enhance farmers’ opportunity for effectively improved productivity; 2. To streamline social development regarding agriculture-based learning for the improved quality of life of farmers so that they will be valuable human resource assets and worthy members of society; 3. To administer funds in such a manner that the cost is kept at the appropriate level reflecting the bank’s key mission with emphasis on liquidity and stability; 4. To develop new areas of services to effectively and productively meet farmers’ needs on the strength of high-caliber staff with sound judgment.

  4. Historical Background Establish in 1966 As a state enterprise under the jurisdiction of MOF to replace the Bank for Cooperatives In response to the financial needs of farmers who during that period depended largely on local money lenders

  5. BAAC’s Development 1966-1976 1976-1986 1986-1996 1996-2006 • Reducing the roles of non-formal financial sector • Introducing innovative financial mechanism by adopting of joint liability group as a collateral for small scale farmers • Facilitating credit services by introducing cash credit-line • Offering credit in kind for providing farm-input • Launching of credit production and marketing linkage • Introducing crop pledging scheme • Launching non-farm credits, quality of life creditssupplement income generating credit • Adoption of Philosophyof sufficiency economy • Enhancing rural community strength • Scaling-upcredit provision to small-scale farmers • Launchingfarm related credit • Establishing Agricultural Marketing Cooperative(AMC)

  6. BAAC Development 2006 – Present • To promote the improved quality of life of small scale farmers. • To extend credit services to persons, groups of persons, entrepreneurs, village or community funds, organizations aiming to promote the career of farmers and communities, and all types of cooperatives. • To extend credits to promote the efficiency production of client farmers.

  7. Board of Directors Audit Committee Risk Management Committee President Senior Executive Vice President (Mr.Promote Nontakote) Mr.Luck Wajananawat • Management Department • Offrice of Public Relation and Organization Communication Audit Department Customer and Product Development Group Senior Executive Vice President (Mr. Ennoo Suesuwan) Branch Adminisitration Group Senior Executive Vice President (Mr. Pramote Nontakote) Organization Strategy Group Senior Executive Vice President (Mr. Somchai Aumphan) Accounting, Treasuty and Information System Group Senior Executive Vice President (Mrs. Poonsook Musiklad) • Executive Vice President • (Mr.Ennoo Suesuwan) • Personal Loan Department • Institutional Loan Departmen • Office of Rural bank project • Executive Vice President • (Mr.Boonchuey Chaidamrongchai) • Government Secured Loan Department • Executive Vice President • (Mr.Pornchai Limpapas) • Strategic Product Markting Department • Debt Management Line • Executive Vice President • (Mr.Isorn Ekpisankit) • Customer and Rural development Department • Office of customer and Product Development • Executive Vice President • (Mr.Vinai Kruetreepradit) • Deposit Services Department • Office of Electronic Banking • Executive Vice President • (Mr.Boonthai Kaewkhuntee) • Office of BAAC Northern Region • Branch Administration (Upper Northern Region) • Branch Adminstration (Lower Northern Region) • Executive Vice President • (Mr.Pornchai Limpapas) • Office of BAAC Northeatern Region • Branch Administration (Upper Northeastern Region) • Branch Administration (Lower Northeastern Region) • Executive Vice President • (Mr.Isorn Ekpisankit) • Office of BAAC central and Eastern Region • Branch Administration (Central Region) • Branch Administration (Eastern Region) • Executive Vice President • (Mr.Boonchuey Chaidamrongchai) • Office of BAAC Southern and Western Region • Branch Administration (Western Region) • Branch Administration (Upper Southern Region) • Branch Administration (Lower Southern Region) • Executive Vice President • (Mr.Adul Kanchanwat) • Policy and Strategy Department • Human Resources Department • Office of Organization and System Development • Office of Research BAAC • Executive Vice President • (Mr.Prayong Tenbee) • General Administration Department • Office of Property Management and Building • Legal Affair Department • Executive Vice President • (Mr.Kamolpant Asaves) • Accounting Department • Treasury Department • Bank and International Business Department • Risk Mangement Department • Executive Vice President • (Mr.Vinai Kruetreepradit) • Information Technology Research Department • Office of Information Technology Program

  8. 75Provincial branches Service Network 1,044 branches and sub-branches 988ATMs 2 Agricultural Central Markets 1,043 Farmers’ Institutions (Memberships1.64mil.) Individual Clients 4.61 mil.

  9. Products and Services • Credit services • Wide rage of agricultural loans and non-farm loans • Loans for quality of life • - education • - medical care • - others • Banking Services • Wide range of Savings Thaweechoke • Thaweesin • Money transfer • Account payment • Currency Exchange

  10. Number of staff 1966-2010 2010 12,612 Starting 1966 178

  11. Number of clients 1966-2010 Unit : Household 2010 6,094,542 Starting 1966 1,890

  12. BAAC Operating Fund 1966-2010 Unit : Million of Thai Baht 2010 764,945 Starting 1966 143

  13. Operating Fund As of March 31, 2010 As of Oct. 30, 2010 5% 764,945 Mil. Baht 799,056 Mil.Baht

  14. Deposits from general public- 2010 Unit : Million of Thai Baht 2010 642,499 Starting 1975 1,195

  15. Disbursement 1966-2010 Unit : Million of Thai Baht 2010 332,000 Starting 1966 78

  16. Loan Outstanding 1967- 2010 Unit: Million of Thai Baht 2010 504,884 Starting 1967 380

  17. Financial Status Unit : Mil. Baht

  18. Financial Ratio

  19. BAAC Plans &Significant Projects 1.Risk Management for Farmer Clients 2.Market Development for Farmer Clients 3.Knowledge Development and Strengthening Farmer Clients and Communities

  20. 1.Risk Management for Farmer Clients As of Oct 31,2010 3,194insured farmers in 7provinces 1.1 Weather Index Insurance Planting areas 60,688 rai* Maize in Year 2010 Collaboration with WB+ General Insurance Assoc. Insured fund 72.143 Mil. Baht Premium 6.069 Mil. Baht Indemnity 4.326 Mil. Baht 1,158 insured farmers in 16districts of Khon-Kaenprovince Planting areas 8,040 rai First crop paddy in Year 2010 Collaboration with Sompho Japan Insurance Co.Ltd Insured fund 16.080 Mil. Baht Premium 0.746 Mil. Baht Streamline for setting up Agricultural Alleviation Fund Indemnity 0.119 Mil. Baht * 1 ha = 6.25 rai

  21. 1. Risk Management for Farmer Clients Nov 9, 2010 1.2 Assistance for flooded farmers in 53 Provinces,517,711 Clients Assistance Measures Hand-out subsistence bags for 49,630clients, amounting 9.92 Mil Baht Donate 1 Mil Baht under the Government-to-People Help Project Debt Suspension for farmers/interest free 3% per annum, principal 47,090 Mil Baht 9 deceased clients were loan written off, amounting 625,027 Baht

  22. 1. Risk Management for Farmer Clients Oct 31,2010 1.3 Thaweesuk Fund Number of participating clients : 785,701 Amount of savings 2,135 Mil. Baht Be able to use 30% of savings as loan collateral Compensation fee for medical treatment in case of accident not over 800 Baht Funeral fee in case of dying of illness not over 10,000 Baht New born fee for 2 babies with 500 Baht each Protection amount not over 100,000 Baht in case of dying of accident 5 Steps of welfare system given to Thaweesuk members

  23. 3. Knowledge Development and Strengthening Farmer Clients and Communities Provide opportunities for low income groups accessible to formal source of fund 3.3Community Bank driven by Village Financial Advisor To finance organizations in community i.e village funds, rural financial institutions or savings groups etc. Target: Credit provision to 300,000 clients, 6,000 Mil. Baht Performance as of Oct 31, 2010 1,790 clients, amounting 36 Mil. Baht

  24. Plan/Government-Secured Loan Projects • Informal Debt Solving Scheme 2. Households Financial Advisor Project 3. Rehabilitation and Debt Suspension for poor and small farmers Project 4. Agricultural Products Pledging Scheme crop year 2008/2009 5. Farm Income Guarantee Scheme

  25. 1. Informal Debt Solving Scheme As of Sep 30,2010 Registered farmers :637,098 Loan outstanding67,708.59Mil. Baht No. of farmers using BAAC loans :354,715 Credit extended 26,148.92Mil. Baht Train farmers in 289Learning Centers Train Living Plan Course to 34,748farmers Train Income Generation Course 8,063farmers

  26. 2.Village Financial Advisor Project Target : 26,000 clients covering 26,000 villages Check household financial health Duties Provide consultancy service Render financial service **To train advisory knowledge in finance to 650 volunteer advisors in 13 provinces by November 2010

  27. 3. Rehabilitation and Debt Suspension for Poor and Small Farmer Project Project completion as of March 31,2010 Participating farmers : 206,709 No. of trained farmers Phase 1: Living Plan Course206,709 farmers Phase 2 : Income-Generation Course192,175farmers Phase 3 : Selection Course 6,244 farmers

  28. 4.Agricultural Products Pledging Project, production crop year 2008/2009 As of Oct 31,2010 CommitmentBalance 66,806Mil. Baht ** Fy 2009/2010 The Project is changed to the Farm Income Guarantee scheme

  29. 5. The Farm Income Guarantee Scheme As of Oct 31, 2010 5.1The Farm Income Guarantee Scheme, crop year 2009/2010 Loan allocated under SP 2 amounting 40,000 mil. Baht, amount reimbursed 39,513 mil. Baht Loan allocated under fiscal budget 2011 (second crop paddy) amounting 5,270.98 mil. Baht

  30. Financing Microenterprisesunder BAAC’s operations • Defined by loan size(≤ THB 50,000) • 2 Types of microenterprises – Entrepreneurs and Community enterprises

  31. The Importance of Microenterprises • Creating jobs • Generating incomes • Creating value add to primary products • Income distribution • Promoting and sharing of knowledge

  32. Characteristics of BAAC’s Microenterprises • Very small size of loans • Very small business volume • Lack of managerial skills • Low technology • Lack of access to conventional financial institutions • Lack of collateral

  33. Financing Microenterprises • Qualifications • Legal entity • Thai national • At least 1 year of operation and profitable • Venue situated in Thailand • Skilled or accomplished training course(s) • Permanent resident in the area of certain branch at least 6 months

  34. Financing microenterprises • Types of loans • Short term loan as working capital • Long term loan for investment • Interest rate • MLR + 0-5% • Collateral • Joint liability group • Guarantors • Mortgaged properties

  35. Factors Determining Interest Rates • Characters 15 points • Performance 15 points • Credit records 20 points • Collateral 25 points • Project feasibility 25 points

  36. Financing Community Enterprises(CMs) • Credit plus • Strengthening moderate CMs • Assisting in establishing new CMs in cooperation with related government agencies • Applying the King philosophy of Sufficiency Economy as a guideline of operations • Marketing linkage

  37. Thank you for your attention

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