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The Role of Microcredit in Poverty Reduction: Empirical Evidence from Thailand’s People Bank Loan Program

Author

Listed:
  • Muanglen, Jintana

    (Faculty of Economics, Ramkhamhaeng University, Thailand)

  • Durongkaveroj, Wannaphong

    (Faculty of Economics, Ramkhamhaeng University, Thailand)

Abstract

The purpose of this study is to: (1) examine the role of microcredit in reducing poverty among all households and its impact on net profit among households engaged in non-agricultural entrepreneurship, and (2) survey experiences and challenges associated with participation in Thailand’s People Bank project. Using nationally representative socio-economic household survey data from 2019 and 2021, covering approximately 50,000 households, the study finds that in 2019, households with at least one member participating in the People Bank project were less likely to be classified as poor. However, this estimated effect is not statistically significant when using the 2021 data. Additionally, households with at least one member borrowing from the People Bank project report significantly higher net profits compared to non-participating households. A survey of 400 residents in Chiang Rai reveals that about two-thirds of program participants report the highest level of satisfaction with the initiative. However, approximately 75 percent of non-participants had never heard of the program. Among respondents, the availability of products and services offered by the program was identified as the most important factor influencing participation.

Suggested Citation

  • Muanglen, Jintana & Durongkaveroj, Wannaphong, 2025. "The Role of Microcredit in Poverty Reduction: Empirical Evidence from Thailand’s People Bank Loan Program," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 32(1), pages 153-175, January-J.
    • Handle: RePEc:ris:apecjn:0114
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    More about this item

    Keywords

    microcredit; People Bank project; poverty;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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