Financial Literacy Findings and Recommendations ReportThe findings in this report were used to...

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

Technical Assistance Consultant’s Report

Financial Literacy

Findings and Recommendations Report

Kingdom of Thailand: TA7998 (THA) - Development of a Strategic Framework for Financial Inclusion in Thailand

(Financed by the Japan Fund for Poverty Reduction)

August 2013

Prepared by Lillian Diaz and Sarinee Achavanuntakul Financial Literacy Specialists Microfinance Services Pty Ltd Gold Coast, Australia For: Fiscal Policy Office Bureau of Financial Inclusion Development Policy

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CURRENCY EQUIVALENTS (As of 1 August 2013)

Currency Unit – Thai Baht (THB)

THB 1 = $0.0320 $1.00 = THB 31.27

ABBREVIATIONS

ADB Asian Development Bank BAAC Bank of Agriculture and Agricultural Cooperatives BOT Bank of Thailand CSO Civil Society Organizations CSR Corporate Social Responsibility FECPP Financial Education and Consumer Protection Partnership FGD Focus Group Discussion FIPD Bureau of Financial Inclusion Policy and Development FPO Fiscal Policy Office GSB Government Savings Bank HSBC Hong Kong and Shanghai Banking Corporation MAP Making Access Possible MFI Microfinance Institution MOF Ministry of Finance NBFI Non-Bank Financial Institution NFE Office of Non-Formal and Informal Education NSFI National Strategy for Financial Inclusion NSO National Statistics Office NVUCF or VF National Village and Urban Community Fund, also referred to as

Village Fund OIC Office of Insurance Commission SEC Securities and Exchange Commission SEPO State Enterprise Policy Office SET Stock Exchange of Thailand SFI Specialised Financial Institution TA Technical Assistance UNCDF United Nations Capital Development Fund

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Asian Development Bank Technical Assistance

TA 7998: Development of a Strategic Framework for Financial Inclusion

(Funded by the Government of Japan through the Japan Fund for Poverty Reduction (JFPR))

The Royal Thai Government (RTG) requested technical assistance from the Asian Development Bank (ADB) in 2010 to support the Government’s initiative to promote financial inclusion in Thailand through a highly consultative process. Approved at the end of 2011 and initiated in early 2012, the process of developing a framework for financial inclusion began with a comprehensive diagnostic of the current state of financial inclusion in the country. The diagnostic was conducted through a collaborative effort with the United Nations Capital Development Fund (UNCDF) using its Making Access Possible (MAP) methodology to support expanding access to financial services for individuals and micro and small businesses. The first part of this diagnostic investigated supply-side and regulatory environment issues including the payments infrastructure. A qualitative and quantitative demand survey was conducted which provided valuable insights on access to finance and client behavior. Other parts of the assessment investigated fields including microinsurance, financial literacy and consumer protection. The final synthesis report brings together the assessment findings and provides key recommendations for going forward.

Reports in Thailand Financial Inclusion Series

1. Microfinance Supply Side Assessment Report

2. Microinsurance Assessment Report

3. Qualitative Demand-Side Research Report

4. Microfinance Regulation and Supervision Report

5. Financial Literacy Findings and Recommendations Report

6. Quantitative Demand Research Report – Finscope Thailand*

7. Consumer Protection Assessment Report

8. Full Diagnostic Synthesis Report

Reports are available at: http://www.adb.org/projects/45128-001/documents

*Finscope Thailand (funded by UNCDF) is available at: http://www.uncdf.org/sites/default/files/download/Thailand%20booklet%20final%2006%20August%202013.pdf

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CONTENTS

I. INTRODUCTION 1

A. Purpose 1

B. Methodology 2

II. SUPPLY SIDE- THE CURRENT FINANCIAL EDUCATION MAP 2

A. Analytical Framework 2

B. Key Issues 3

1. Delivery Channels 3

2. Business Models 3

3. Does Financial Education Work? Outcomes Measurement 3

C. Financial Education Providers Snapshot 4

1. Specialized Financial Institutions 4

2. Commercial Banks 5

3. Independent Bodies 5

4. Civil Society and NGOs 8

D. Other informal entry points 9

1. Buddhist temples/monks 9

2. Opinion leaders/Mass Media Personalities 10

3. Informal education and distance learning 13

III. DEMAND SIDE FINDINGS 14

A. Financial Capabilities of target market 14

1. Adequate basic arithmetic skills and understanding of “purchasing power” 14

2. People feel financially “stressed” when managing their money 14

B. Notable Geographical Differences 17

1. Higher social cohesion in areas where people are less likely to keep track of finances 17

2. Thais do not go to banks for financial advice - except Bangkok residents 18

3. Low reach of financial education programs: private banks in Bangkok, SFIs elsewhere 19

4. Different regions have different ‘priority issues’ 20

C. Different Demographics, Different Priorities 22

1. Target for increasing financial access: taxi and motorcycle drivers in Bangkok 22

2. Target for increasing financial access: sex workers in Bangkok 25

3. Target for “debt management” education: farm workers in Chiang Rai 28

4. Target for “saving” education: Muslim wage earners in Nakorn Si Thammarat 31

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IV. KEY FINDINGS AND RECOMMENDATIONS 33

A. Policy Level Recommendations 33

B. Implementation and Programmatic Recommendations 34

APPENDIX 1. LIST OF KEY INDIVIDUALS INTERVIEWED 40

APPENDIX 2. ANALYTICAL FRAMEWORK (A) 42

APPENDIX 3. ANALYTICAL FRAMEWORK (B) 46

APPENDIX 4. ANALYTICAL FRAMEWORK (C) 49

Tables

Table 1: Media Programs & Personalities Focusing on Financial Education .............................12

Table 2: Awareness of Consumer Rights ..................................................................................16

Table 3: "You keep track of your income & expenditures on a monthly basis" ...........................17

Table 4: You have someone in the community who is willing to help when you need it" ............18

Table 5: "Apart from family and friends, who do you go to for financial advice?" .......................19

Table 6: Most Popular Financial Training Sessions ...................................................................20

Table 7: Spending tendancies ...................................................................................................21

Table 8: Increasing Financial access for Taxi and Moto Drivers ................................................23

Table 9: Financial products & services used by Commercial Sex Workers ................................26

Table 10: Financial products and services used by Farm Workers ............................................29

Box 1 Innovations, The Debt Doctor ........................................................................................... 4

Box 2: E-banking innovations, "K-Expert" from Kasikorn Bank ................................................... 5

Box 3: Building a loyal customer base through consumer education .......................................... 6

Box 4: Khom Loy Foundation & Room to Grow .......................................................................... 7

Box 5 Innovation Case Study – TRF .......................................................................................... 9

Box 6: Innovation Case Study – Alms-bowl Savings .................................................................10

Box 7: Customer Activation in Tanzania ....................................................................................36

Box 8: Global Example, Diverse Providers to Delivery Financial Education in India. .................36

Box 9: Global Example: Teaching with TV drama, Kenya .........................................................36

Box 10: Global Example, Mint helps track Spending in New Zealand ........................................37

Box 11: Global Example, Keeping training messages simple ....................................................38

Box 12: Global Example, Financial Education through Mass Media, South Africa .....................39

Box 13: Impact Evaluation, Understand your Money, Kenya .....................................................39

Box 14: Global Example, Subsidies Prompt Savings, Indonesia and India. ...............................39

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Figures

Figure 1: Debt Doctor Training ................................................................................................... 3

Figure 2: Students learn fiancial capabilities through games ...................................................... 5

Figure 3: Screen shots from SEC's 'Start-to-Invest' App. ............................................................ 7

Figure 4: 'Debt Service' page from TRF's household account book ............................................ 8

Figure 5: Phra Subin Paneeto on the importance of saving ........................................................ 9

Figure 6: Example of alms bowl for savings ..............................................................................11

Figure 7: "Beauty without toxins" cartoon ..................................................................................13

Figure 8: 'Makutano Junction' episode ......................................................................................36

Figure 9: Mint.com screen shot .................................................................................................37

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I. INTRODUCTION

A. Purpose

The Asian Development Bank-funded Technical Assistance Program Development of a Strategic Framework for Financial Inclusion in Thailand will support the Government of Thailand’s initiative to promote financial inclusion through a highly consultative process. The project scope includes conducting a diagnostic assessment of the current framework for inclusive finance that will inform the strategic framework.

The wider Diagnostic on Financial Inclusion in Thailand includes several component reports investigating respectively the supply-side issues for microfinance, microinsurance and the enabling structures such as supervision and regulation as well as consumer protection. A Synthesis Report will summarize a diagnostic assessment of all the component reports, drawing out conclusions and recommendations. This Report on Financial Literacy is thus one part of a wider study looking specifically at the supply and impact of financial education services in Thailand, assessing the demand for financial literacy, and providing policy and operational recommendations.

In this report, the mapping of the supply-side is followed by a demand-side assessment which examines the impact of financial services from a consumer perspective. Importantly, the authors have integrated the key findings and analysis of all the other component studies related to financial literacy into this report. This facilitates a needed comprehensive analysis of the strengths and deficiencies in the overall provision of financial services, allows an articulation of the demand and nascent demand for financial literacy, and allows for sound evidence-based recommendations to support the development of a National Strategy for Improving Financial Inclusion.

Financial Literacy is an area that the Government of Thailand is particularly interested in supporting, and their Strategic Framework will include a component that articulates strategies and implementation activities to promote financial literacy for specific target audiences.

The objectives of the financial literacy supply-side research performed were to:

Present and describe the key financial education programs operating in Thailand that are reaching low-income populations;

Analyze programs according to selected criteria;

Identify promising models, content and delivery channels and innovations that might be scaled up; and

Articulate recommendations linked to local and global lessons learned

The objectives of the financial literacy demand-side research were to

a. Assess the level of financial literacy in Thailand, including gaps in knowledge, skills and attitudes across all target audiences required to make optimal use of services on offer; and

b. Identify potential key issues which may vary by demographic groups and regions, in order to better target efforts to improve financial capabilities

The findings in this report were used to complete the diagnostic assessment (including financial literacy components) of the overall Synthesis Report.

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B. Methodology

For the supply-side research, a two-person consultant team conducted both primary and secondary research between March and September 2012. Primary research included roughly 40 interviews with key financial education program implementers, funders and government agencies in Thailand1. Secondary research included internet-based research and a thorough review of technical documents in the area of financial literacy.

Two significant limitations exist with the supply side study. The first limitation is that no Financial Education program in Thailand has conducted an outcomes assessment to measure changes in financial behavior. Without this body of data and insights, no hard conclusions can be made on program effectiveness to improve financial literacy. The second limitation is that most materials are available only in Thai, and although one half of the consultant team compiling this report was a Thai national, translation of the multitude of Thai materials has been a limiting factor.

To conduct demand-side research, the team added financial literacy components to both the qualitative and quantitative research methodologies used in this project. For qualitative research, consultants framed research questions pertaining to financial literacy. Subsequently, the National Financial Literacy Specialist supervised 200 Focus Group Discussions (FGDs) in four provinces and Bangkok, encompassing 1,200 respondents. For quantitative data, consultants revised and added a “Financial Literacy” section and related sections to the FinScope survey.

Two significant limitations faced during the course of conducting demand-side research were: the short time frame available for “unpacking” segment data (by geography, income group, education level, etc.) from the FinScope survey, and the reluctance of FGD participants to disclose their personal debt problems. These limitations result in the analysis and recommendations being less representative than the ideal.

II. SUPPLY SIDE- THE CURRENT FINANCIAL EDUCATION MAP

The consultant team identified 25 financial education programs currently implemented in Thailand. An analytical framework was created to collect, analyze and present information to stakeholders involved in improving financial literacy (Please refer to APPENDIX 2 for the complete Analytical Framework).

A. Analytical Framework

The analytical framework presents the following information:

Program Information

Program Name

Implementing Agency

Funding Agency

Program Features

Target audience

Geography

Objectives

1 See Appendix for full list of individuals interviewed.

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Financial education topics addressed by program

Delivery channels (e.g. seminars, training, one on one counseling, mass media such as print, radio, TV)

Business model (e.g. how does the program cover its costs)

Results to Date

Outreach to date

Feedback from users

Evaluation or outcomes assessments

Perceived challenges

While the analytical framework provides standard program information, it also includes some topics that are hotly debated in financial literacy circles. These issues are briefly explained below.

B. Key Issues

1. Delivery Channels

There is an ongoing shift in the financial education sector from the use of classroom training sessions as the main and most popular delivery channel, to a mix of delivery channels including the use of mass media to convey financial education messages. By exploring which delivery channels are used in Thailand, we looked to see if there are opportunities for the use of alternate delivery channels.

2. Business Models

Who pays for financial education? Recent trends are showing that financial education is the responsibility of both public and private sectors. For example, the Financial Education and Consumer Protection Partnership (FEPP) in Kenya is led by the Central Bank Governor. It brings together stakeholders from multiple organizations (such as banks and microfinance institutions) including the Ministry of Finance. 2 Sometimes governments and funders have resources to directly pay for programs but commonly, private sector players also need to develop a business model to cover the costs of delivering financial education programs. Some of these models include charging a fee for service, allocating marketing or sales budgets towards financial education programs and using advertisements or sponsorships to pay for programs. To ensure financial sustainable of financial education campaign and initiatives, financing mechanisms need to be considered early on in program design.

3. Does Financial Education Work? Outcomes Measurement

Another hot topic is whether or not financial education actually works. In other words, do financial education interventions lead to positive changes in: firstly, financial literacy; and secondly, financial behavior? Given the nascent stage of financial literacy in developing and middle-income countries, there are very few evaluations or

2 http://www.fepkenya.org/index.php

Figure 1: Debt Doctor Training

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outcomes assessments to date.3 If Thai program implementers had evidence of models that work, this would not only be significant in Thailand but could also inform the broader financial literacy sector.

C. Financial Education Providers Snapshot

1. Specialized Financial Institutions Currently the majority of lower income Thai households living in rural areas are served by the government-owned Bank for Agriculture & Agricultural Cooperatives (BAAC) and, in urban areas, the Government Savings Bank (GSB), the two major government-owned specialized financial institutions. Several programs of the BAAC, such as “Smart Farmer”, attempt to integrate financial education into banking product delivery. GSB with its historical roots as a “savings bank,” particularly for children, has a well-established record of savings-based financial education content. For example, the GSB is active in helping primary and secondary schools establish student-run banks. However, as of the time of writing this report there has been little impact assessment for such large-scale programs. Error! Reference source not found. Box 1 escribes the BAAC and GSB funded Debt Doctor Program and Training in process.4

Both BAAC and GSB have great potential to reach a larger audience because of their vast service network in Thailand. BAAC has 84 “sufficiency economy learning centers5” in addition to its 906 branches nationwide. GSB has 1,002 branches and 470 “school banks” (banks in primary and secondary schools that are run by students which the GSB helps set up nationwide).6

3 See studies published by Genesis Analytics; Cole, Sampson and Zia 2009; Drexler, Fischer and Schoar 2010; and

Woodruff and Martinez 2008

4 Information of Debt Doctor program in Error! Reference source not found. summarized from BAAC press release,

19 December 2010, http://www.thaigov.go.th/en/news-ministry/2012-08-15-09-16-10/item/52688-.html?tmpl=component&print=1

5 “Sufficiency economy” is a model proposed by HM the King of Thailand as early as 1970: http://www.chaipat.or.th/chaipat_english/index.php?option=com_content&view=article&id=4103&Itemid=293

6 BAAC website, accessed January 15, 2013.

Box 1 Innovations, The Debt Doctor

Launched in 2010, the Debt Doctor program aims to train willing villagers to act as “debt counselors” in their local communities. Jointly funded and run by BAAC and GSB, BAAC announced that the bank has set aside THB 6 billion for the project and aims to help over 300,000 villagers by the end of 2013. Each Debt Doctor is nominated by the villagers themselves, and has a two-year tenure. At the end of this period his or her performance as a debt counselor will be evaluated. Every Debt Doctor receives a one-day training conducted by GSB personnel. The training covers a four-step process that Debt Doctors should use to counsel individuals on debt resolution. Specifically, the steps include: 1) Asking about symptoms, 2) Finding root causes of symptoms, 3) Curing the symptoms; and 4) Building immunity. BAAC plans to fund Debt Doctors’ stipend, while GSB funds the train-the-trainer process. However, as of 30 September 2012, the government has not approved budget for Debt Doctor stipend proposed by BAAC, leading to high uncertainty as to government’s commitment and potential sustainability of the program. To date GSB has trained over 12,000 Debt Doctors nationwide and aims to train 180,000 Debt Doctors by the end of 2013.

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2. Commercial Banks

There is a strong consensus among the commercial banking sector that financial literacy is needed in Thailand. In an interview with the research team, Dr. Tawatchai Yongkittikul, Secretary General of the Thai Bankers’ Association, affirmed that financial literacy is needed because people are spending money “unwisely,” i.e. spending for short-term gratification at the expense of long-term needs. However, despite this consensus, very few commercial banks are actively involved in large-scale financial education programs targeting low-income clients.

Box 2: E-banking innovations, "K-Expert" from Kasikorn Bank

As part of its wealth management product initiatives under the brand “K-Expert,” Kasikorn Bank launched the www.askkbank.com website and a financial planning helper program called “K-Saving Memo” in 2011. The program is available from the website as a free Microsoft Excel workbook, iPad application, and online version, all of which require either free registration before use or downloaded software. This initiative is commendable for providing a free financial budgeting program to the public. Its major limitation is that it is not much more than a “recording” program, with no recommendations or advice parameters. This lack of advice parameters, as well as heavy emphasis on the details of urban income and expenses and reliance on Internet access demonstrates that the market for such a product is likely limited to middle-class urban Thais who already know the importance of financial planning and feel the urge to do their own budgeting.

Commercial Banks in Thailand are basically driven to deliver financial education for two reasons. The main driver is Corporate Social Responsibility (CSR). Banks such as Krungrsi Bank (Bank of Ayudhya Public Company Limited), Hong Kong and Shanghai Banking Corporation (HSBC), Standard Chartered, Kasikorn Bank, and Thai Military Bank offer very small-scale programs often involving volunteers from their own financial institutions to serve as trainers. The main target audiences of these programs are students from primary and secondary schools as well as vocational schools and universities. The most common delivery channel is classroom training, most often broken down into 60 or 90 minute training sessions. These sessions usually include some elements of participatory training methods.

While some programs develop their own training curricula and materials, other Corporate Social Responsibility (CSR) programs such as HSBC-CSR, partnered with Junior Achievement 7 which uses a generic curricula adapted for the Thai context.

3. Independent Bodies

Financial education is a priority for many regulatory agencies in Thailand. Included here is an overview of some of the primary financial education activities that Thailand’s independent regulatory bodies currently implement to promote financial education.

a. The Stock Exchange of Thailand and the Securities Exchange Commission

The Stock Exchange of Thailand (SET) and the Securities Exchange Commission (SEC) are the most active regulators in this area. The SET’s well-known financial education program, which

7 US-based youth education non-government organization. Their website states that “Junior Achievement is the

world’s largest organization dedicated to educating students about workforce readiness, entrepreneurship and financial literacy through experiential, hands-on programs.” (http://www.ja.org/about/about.shtml)

Figure 2: Students learn fiancial capabilities through games

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aims to inculcate long-term saving habits for primary and secondary school students so that they may be potential stock investors in the future, has reached well over 7 million students in Thailand through its wholly-owned subsidiary, Thailand Securities Institute (TSI).8 However, like many of the other available financial education programs cited in this study, there has not been a systematic impact assessment of the program.

Box 3: Building a loyal customer base through consumer education

Krungsri Bank’s Simple Finance Program focuses on five topics - Smart Consumer, Smart Employee, To be an Entrepreneur, Basic Savings and Investment, and Managing Your Loan. The Office of Vocational Education Commission (OVEC) under the Ministry of Education helps select potential vocational schools to train senior-year vocational students who are about to graduate. To engage participants, Krungsri Bank designed a game using a ping-pong ball to teach vocational training students about setting short and long term goals and the importance of planning. Games, role-plays and simulations are effective training tools to engage participants. In 2012, Krungsri Banks planned to reach 800 participants.

Educating potential customers on how to manage their money and make informed choices when it comes to banking products and services is a strategy to build a loyal customer base. For example, Kasikorn Bank offers a range of investor education programs to teach investors about retirement planning and how to take advantage of different investment strategies such as purchasing stocks, bonds, etc. The target audiences for this program are middle class, salaried workers, and as a result, they deliver financial education using a range of delivery channels including booklets, Internet sources and iPad applications. Other financial institutions interviewed shared that they are currently researching and developing financial education programs for wet market vendors. Their aim is to offer short training sessions to potential clients before offering a loan as a way to minimize credit risk.

Although the Ministry of Education has not made such financial education programs a part of mandatory curriculum in schools, the SET regularly publishes financial education books that are widely sold in bookstores and accessible to students.

The SEC is a relative newcomer in the area of financial education, but it has demonstrated a strong commitment to promoting financial literacy among potential investors. The organization is interested in using new channels to reach the public, as evidenced by the broadcast of one-minute “Start-to-Invest” episodes in the TV program “Chris Delivery” on Channel 5. In June 2012, the SEC launched a “Start-to-Invest” application for iPhone and iPad. The application (shown in Figure 3) is currently limited to showing latest mutual funds and providing a simple financial calculator that can, for example, calculate required annual rate of return to reach retirement nest egg amounts.

8 Interview with Krisada Sektrakul, Director, Capital market Development Fund, Thailand Securities Institute (TSI)

under the Stock Exchange of Thailand, August 8, 2012.

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Figure 3: Screen shots from SEC's 'Start-to-Invest’ App.

b. The Financial Consumer Protection Center

In 2012, the Bank of Thailand (BOT) opened the Financial Consumer Protection Center. At the core of the Center’s objectives is to:

“Equip consumers with financial knowledge in order to raise awareness and understanding of consumer rights and responsibilities, avoid becoming victims of fraud, and enable informed decision making on financial products and services. Promoting financial knowledge will be conducted through a number of channels such as the Bank of Thailand’s website, publication, public seminars for consumers and business operators with collaboration with alliance organizations in order to spread financial knowledge through consumers more expansively”.9

c. The National Credit Bureau Limited (NCB)

The NCB, Thailand’s only credit bureau, plans to broaden its scope to include financial education programs in 2013. Currently the company gives some debt counseling and advice to retail borrowers who have questions regarding their credit report; however, the NCB does not yet incorporate a systematic approach to deliver its debt counseling.

Box 4: Khom Loy Foundation & Room to Grow

The NGOs Khom Loy Foundation and Room To Grow received a $10,000 grant for eight months from UNIFEM and MasterCard to design a financial education program for migrant workers living on a landfill community. Knom Loy Foundation did not develop materials from scratch, but adapted curriculum from World Education, Youth Connect and US Peace Corps. Participants participate in a real-life market simulation to practice money management skills learned in the training. This highly targeted program reached 60 people in 2011.

9 Bank of Thailand (2012). The opening of the Financial Consumer Protection Center [Press Release]. Retrieved from

http://www.bot.or.th/Thai/PressAndSpeeches/Press/News2555/n0355e.pdf

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4. Civil Society and NGOs

Organizations such as the Kenan Institute Asia, Thailand Research Fund, Khom Loy Foundation and Step Ahead Foundation each offer financial education to low-income, disadvantaged and un-banked segments of the population. Civil Society Organizations (CSOs) are mostly run on grant funding, both from within Thailand and from abroad. For example, the Kenan Institute implements programs for Citi Foundation; separately, Khom Loy Foundation is implementing programs for UNIFEM and the Mastercard Foundation (refer to

Box 4: Khom Loy Foundation & Room to Grow).

Classroom training sessions tend to be the most common delivery model utilized by CSOs and NGOs; however, rather than focusing on classroom training in the traditional way, they bring their ‘classroom’ to the field. In the case of Khom Loy Foundation, which is based in Mae Sot, they deliver financial education training sessions at the garbage dump sites which is convenient for the target audience - Burmese migrant workers. The Kenan Institute, whose target beneficiary is at-risk women in Bangkok, delivers trainings in slum neighborhoods in partnership with local authorities; additionally, the Kenan Institute is developing a new program to train women at correctional facilities. The organization plans to implement this new program sometime in 2013.

The Thailand Research Fund (TRF) uses a unique model that engages local government officials (who are elected from among the villagers themselves) to take part in the program at the outset, in order to ensure that villagers will continue to have the incentive to record their income and expenses long after the research project is over (refer to Box 5: Innovation Case Study, TRF).

Figure 4: 'Debt Service' page from TRF's household account book

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Box 5 Innovation Case Study – TRF

Civil society organizations show the most commitment to measuring results and outcomes, i.e. changes in knowledge, skills, attitudes and financial behaviors. Kenan Institute Asia measures short term recall by administering a pre and post test after each financial education training session delivered to their target audience. The Thailand Research Fund does follow-up meetings every month with the villagers who use household account books. TRF identifies villagers who have better household finances as a result of knowing more information about their income and expenses from using household accounts, and then invites them to serve as trainers to incentivize more villagers to record their income and expenses.

Using the household account book shown in Error! Reference source not found. in a survey of 782 households reported that on average they were able to reduce debt by 36,000 Baht household per year. Mostly via 1) consumption reduction 2) cost of production reduction 3) savings from consumption-substitution production, and 4) getting together to form community enterprises in order to reduce expenses and increase income.10

D. Other informal entry points

1. Buddhist temples/monks

In all regions of Thailand, particularly the rural areas, many Buddhist temples remain the nexus of local community life. Monks have the potential to be effective deliverers of financial education programs due to their general high standing in the community, high literacy, and the fact that villagers gather together at the temple on various Buddhist holidays and religious festivals throughout the year.

This concept is not completely novel, and in fact, several monk-cum-social-workers, i.e. so-called “development monks” are already famous in Thailand for integrating Buddhist teachings with sound financial management principles and imparting them successfully to villagers. For

Interview with Silaporn Buasai, Programme Director, Programme on Community Research, 10. Thailand Research Fund (TRF), August 27, 2012.

Thailand Research Fund’s (TRF) household account project uses a well-rounded management structure that engages local researchers with local authorities from the beginning of its project. This management structure encourages local authorities to use aggregate household accounting data to do better community plans. In practice, the head researcher for each province (often a local university professor or NGO in the area) assembles a team at the sub-district (tambon) level. One of the key requirements is to have one or more local government personnel as team member(s). The team then teaches household accounting to get villagers to record their income and expenses on a weekly basis. Every month the local authorities prepare volunteers to enter key information into computers, the team then shares findings with villagers. This way the local authorities can begin to see what financial challenges arise in their villages, and formulate action plans to solve those problems.

One telling example is from Chaiyapoom: after a few months of recording household finances and aggregating data, villagers in one tambon noticed that they spent a lot of money on eggs every month. They then got together to form a chicken co-op with the help of the local government who assisted by drafting the action-plan and provided the budget. The co-op allowed participant members to save on the cost of purchasing eggs by supplying members with eggs laid from chickens they raised themselves. A few months later, this co-op travelled to another province to learn how to make their own chicken feed to cut back on this production input expense.

Figure 5: Phra Subin Paneeto on the

importance of saving

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example, Phra Subin Paneeto in Trad Province, applied the “sajja om sab” (honesty saving group) concept invented by Chob Yodkaew in Songkhla (see Figure 5: Phra Subin Paneeto on the importance of savings). Mr. Chob is the well-known grassroots financier who invented the “one Baht expense reduction fund” scheme, after realizing that many villagers feel they are unable to save because they associate “saving” with “having to gain more income” in order to save. Because they feel that gaining more income is impossible, they feel it impossible to save. Mr. Chob overcame this mental hurdle by encouraging villagers to save more by “cutting expenses” because cutting existing expenses is far easier to do in most villagers’ minds than earning more income.

Box 6: Innovation Case Study – Alms-bowl Savings

Another example of innovation which features the intersection between finance and Buddhism is the concept of “alms-bowl savings”. For example, in Baan Kaam district, Chaiyapoom province, villagers use monks’ alms-bowls to save as often as they can, then at the end of the year they bring the alms-bowls to the temple, where monks inspect savings in the bowl and can quickly glean information about the family’s financial health relative to last year and give advice accordingly. For example, if the bowl is not as full as the year before, that means the family has probably undergone some financial difficulty this year. Monks therefore act as “financial counselor” while receiving alms from the family, who then take back the bowl to try to fill it up for another year. This “savings alms-bowl” concept is gaining traction among Buddhists as a way to inculcate saving discipline and saving up to “make merit” at the temple simultaneously.

Phra Subin infused Mr. Chob’s concept with Buddhist teachings, elevating it to the concept of “money as means to attain moral conduct” in order to incentivize villagers to save. Twenty years after Phra Subin founded the savings group in Trad, it has grown into a vast network containing over 170 self-managed groups, with over 62,000 members and 1,300 million Baht in total savings.

2. Opinion leaders/Mass Media Personalities

There is currently a litany of financial education content in the Thai media (TV, radio, and newspapers). However, the vast majority of this content caters to middle-class office workers, focusing on investment advice (particularly stocks and mutual funds), financial planning, and tax management. Some of the more notable media programs and personalities in this area are listed in

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(below).

Figure 6: Example of alms bowl for

savings

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Table 1: Media Programs & Personalities Focusing on Financial Education

No Name Type of Media Frequency Topic[s] covered

1 “Money Pro” column, by Wiwan Tarahiranyachote

Krungthep Turakij newspaper & website Bi-weekly Financial planning, general finance

2 “Understand & Know How to Use Money” by Sunan Srichanthra, Dr. Niwes Hemvachirakarn, and Kanchana Hongtong

Radio FM96.5 Weekly Financial planning, investment tips

3 Personal finance column by 3 columnists – Sorawis Eambamroong, Kanchana Hongtong, Atchara Yomsilp

Krungthep Turakij newspaper & website Daily Financial planning

4 “Money Matters” by Pravir Pichaisoratat

Thaipost newspaper Daily (Q&A format, “Dear Abby” style)

Financial planning

5 “Bualuang Money Tips” by fund managers at Bualuang Asset Management

ASTV Manager newspaper and website Weekly Investment advice

6 A-Academy: Academy of Simple Finance, by Sakda Sappanyawong

Website, http://a-academy.net/, with Excel worksheet and over 50 screencasts on YouTube: http://a-academy.net/personal-finance/

Weekly Financial planning, investment

7 Thailand Investment Forum

Facebook Page https://www.facebook.com/ThInvestForum

Weekly Financial planning, investment

8 TaxBugNoms Blog http://tax.bugnoms.com/

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illustrates, the vast majority of media content in Thailand is currently targeted at middle-class office workers. In order to reach a low-income population which is the main target of financial inclusion, both the format and style of the media content must be designed to fit that target segment. For example, one could write financial literacy songs, radio scripts, and drama scripts to be performed by well-known performers in the local tradition mor-lam for Northeastern provinces and nang-ta-lung for the Southern provinces.

Cartoons are another potentially powerful channel to reach low-income groups, especially short booklets or ‘pulp cartoons’ that cost 3 to 5 Baht each. One recent example from another initiative is the set of “media literacy” booklets launched in April 2012. This is a set of 3-Baht books jointly developed by Child Media Institute, Foundation for Child Development, Thai Health Foundation, and famous cartoonists at Bunleusarn Publishing (see example below: Figure 7: "Beauty without toxins" cartoon).

3. Informal education and distance learning

Another potentially effective delivery mechanism of financial education programs, particularly in the rural areas, is through the networks of various informal education and distance learning organizations in Thailand. For example, as of July 2012 the Office of Non-Formal and Informal Education (NFE) under the Ministry of Education has 1,039 centers at the provincial and district (amphoe) level nationwide, 7,403 centers at the sub-district (tambon) level, manages 853 public libraries, has over 17,000 teachers (roughly 3,000 of whom are tenured civil servants, 8,500 are hired on a contract basis, the remaining 5,500 are teacher-volunteers). All of these resources currently serve over 1 million students at all levels. If the reach of all NFE education programs, e.g. public libraries and educational TV are included, NFE estimated that it reached over 25 million people in 2012.11

NFE Statistics 2011, http://www.krukorsornor.com/UserFiles/File/NFE_STATISTICS.pdf, accessed on 10 September, 2012.

Figure 7: "Beauty without toxins" cartoon

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III. DEMAND SIDE FINDINGS

A. Financial Capabilities of target market

The FinScope survey and qualitative demand research have uncovered a number of “common financial behaviors” of Thais across all regions and demographic groups which highlight key areas in which financial capabilities can be strengthened. Notable behaviors that we observed are as follows.

1. Adequate basic arithmetic skills and understanding of “purchasing power”

Most low-income FGD participants can do simple arithmetic calculations. The demographic which answered basic division least correctly is low-income rural workers in Chiang Rai, of whom only 64% correctly. The percentage of people in other demographics who answer this question correctly ranges from 83% (low-income farmers in Chai Nat) to 100% (middle-income farmers in Chiang Rai and virtually all urban groups in all provinces).

Most people have never heard the term “inflation” but in general, most answer correctly that if prices go up next year, they will be able to buy fewer things. The demographic which is most confused about inflation and does not understand the impact of prices on purchasing power is low-income rural workers in Chiang Rai, of whom only 2.8% answered correctly.

2. People feel financially “stressed” when managing their money

FinScope survey reports that over 80% of Thai population knows that budgeting is useful in that it helps them manage their finances. However, only one-third says they track monthly income and expenses. This is in line with results from qualitative research, which shows that even for middle-income groups, less than 15% of all respondents say they record income and expenses.

Of all participants across all five provinces and demographics, less than 5% regularly do household accounting. Roughly 20% of all participants said they used to do so in the past, but stopped after a short time because they “feel stressed” at seeing more expenses than income, “income is too uncertain” to record, “do not see the use” of such records, and/or they “feel too lazy” to continue. “I feel stressed” was cited most often as the key reason they stopped recording income and expenses. Almost everyone who says he/she records income and expenses regularly says that the main purpose for doing so is to reduce unnecessary expenses; roughly half say they also use these records to budget for next month.

The above finding from qualitative research corresponds with the FinScope survey, which shows that 60% of Thais say dealing with finances is “a burden” or “stressful.” This finding suggests that creating incentives for people to overcome budget stress will be an important building block to enhancing financial capabilities. In other words, it is not sufficient to provide financial education tools; those tools will need to be embedded with constructive advice, feedback and incentives to encourage their use.

3. People put little emphasis on long-term saving

Only 42% of FinScope respondents say that they “save enough” to cover household expenses each month. When asked what they save for, all the reasons cited that have over 50% response rate are related to short-term needs or emergencies. Long-term saving needs such as retirement/old age and education have less than 30% response rate. These items are similar in that they have a fixed schedule and the amount is well-known to the household. From the FGDs, less than 10 participants say that they have plans to cope with unexpected expenses such as emergencies, such as buying life insurance and setting aside savings.

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Other major expenses that typically require long-term planning include house building, marriage, and monk’s ordainment ceremony. However, low-income respondents in the FGDs view these expenses as non-urgent, and can be downscaled and tailored to fit their financial situation. For instance, they can use local material and own labor when building a house, and wait until they accumulate enough savings to marry or become ordained as a monk. This flexibility reduces the incentives to plan ahead. This finding suggests that Thais do not yet place much emphasis on long-term saving and do not use long term savings products to reach their savings goals. There is significant room for long-term saving products and corresponding financial education to be integrated into the delivery of such products including product design and marketing.

4. “Fear of debt” and lack of understanding hamper responsible borrowing

Household debt in Thailand compared to GDP is rising at a pace that is generating concern. In Q1 2013, household debt as a percentage of GDP had risen to 75%, from 51% only 6 years earlier in Q1 2007. During the same period, disposable household income relative to GDP has stayed more or less flat at around 53-54%, suggesting that debt-servicing capacity has not increased in line with debt burden. In this climate, a clear understanding of debt and its implications must be a key component of every national-level financial capabilities program. Less than 30% of rural workers across all four provinces in the qualitative research know how to calculate interest payments, when given interest rate and initial principal amount. Overall, more than half of all participants are not aware of the interest rate that they are being charged on their outstanding loans, saying that they simply pay the amount indicated on monthly invoice from banks and NBFIs.

Coupled with the finding from FGDs that “small monthly payment amount” is cited as one of the top two loan features people prefer, this suggests that Thai borrowers overall cannot compare loan terms well, and there is a considerable risk that borrowers may be misled or inadvertently put in an over-indebtedness situation; for example, they may choose a debt restructuring offer that slightly reduces monthly payment, simply because they do not see that it increases their overall debt burden (especially unregulated loans such as informal loans that charge flat rate and do not offer declining balance).

5. Lack of awareness of how to safeguard consumer rights and grievance channels

Only 2% of respondents in the FinScope survey said that they “had problems or dispute” with financial service providers. Among those few who said they had, the majority of complaint is “cannot pay on time” followed by “interest or fees to high.” This result is largely consistent across different regions, except North municipal area which “bad debt collection practices” came in second after “cannot pay on time.”

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Table 2: Awareness of Consumer Rights

Cannot pay on

Bad debt collection practices

Misunder-stood

contract

Misleading Advertis-

Interest /fees too

Personal info was

Complaint not

resolved

Bangkok Municipal Area

28% 10% 16% 16% 26% 0% 3%

Central Municipal Area

50% 11% 11% 11% 17% 0% 0%

Non-municipal

55% 0% 10% 5% 25% 5% 0%

North Municipal Area

50% 30% 0% 0% 20% 0% 0%

Non-municipal

46% 8% 8% 8% 31% 0% 0%

Northeast Municipal Area

60% 5% 10% 5% 10% 5% 5%

Non-municipal

67% 0% 0% 0% 33% 0% 0%

South Municipal Area

48% 5% 14% 5% 24% 5% 0%

Non-municipal

80% 0% 0% 0% 20% 0% 0%

Averages 44% 8% 12% 9% 23% 2% 2%

When asked “What did you do when you have a problem,” over 47% of respondents said they “did nothing,” 42% contacted the financial provider directly, and less than 5% contacted the Bank of Thailand or consumer protection agencies.

Currently Thai financial institutions are offering an increasingly complex array of financial products, and sometimes “bundle” different products together, such as insurance with loans or savings, in such a way that consumers are not aware of the components and consequences. These findings suggest there is ample room for financial education innovations relating to debt, from facilitating a better understanding of different kinds of debt and their uses, to better disclosures of terms, to effective debt management. At the same time, regulators led by the Bank of Thailand and Ministry of Finance (as regulator of SFIs) should mandate improved disclosure standards for all financial products and a stricter enforcement of no-bundling rules, in order to increase awareness of consumer rights, as well as safeguarding those rights.

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6. Confusion and mind-set barriers to using new products and services

Overall, Thais are well-equipped with technology and are familiar with financial providers: 88%

use cell phones (this figure is 83% even for low-income group, i.e. those who earn less than 3,000 Baht per month), 75% have a deposit account, and 79% say they “trust banks with their money.” However, only 1% of Thais currently use mobile banking. More importantly, significant gaps in the understanding of products build a “mind-set barrier” which erodes the willingness to try or use new products and services. For example, microinsurance qualitative research finds that although Thais are familiar with the term prakan (“insurance” in Thai), some respondents are confused between government welfare/social protection programs and insurance as a financial product, and most people do not understand concepts such as premium and benefits.

B. Notable Geographical Differences

In addition to common financial behaviors noted above, FinScope survey results have uncovered several notable geographical differences. These differences suggest that both the issues as well as delivery channels of financial literacy initiatives can be tailored to fit the target market in each region. Some notable differences we observed are as follows.

1. Higher social cohesion in areas where people are less likely to keep track of finances

Although Thais across all income groups and geographical locations say they “like to be in control of finances and money matters,” people outside Bangkok and Southern municipal areas are more inclined to keep track of finances than other areas. Breaking down FinScope results by region, we see that Bangkok and the South municipal area respondents keep track of finances markedly more than other regions: percentages of those who responded “completely agree” or “agree” to the question “You keep track of your income and expenditure on a monthly basis” are 49% and 44% respectively, compared to 29%-33% in other regions:

Table 3: "You keep track of your income & expenditures on a monthly basis"

Completely agree

Completely

disagree

Not sure

1 2 3 4 5

Bangkok Municipal Area 4% 45% 41% 7% 2%

Central Municipal Area 5% 24% 50% 16% 5%

Non-municipal Area 6% 22% 57% 11% 4%

North Municipal Area 5% 26% 53% 14% 2%

Northeast Municipal Area 4% 29% 55% 11% 2%

South Municipal Area 13% 31% 47% 7% 2%

Average 5% 29% 51% 11% 3%

However, regions where people least keep track of finances are also the same regions that show a high response rate to the question “You have someone in the community who is willing to help when you need it,” except for Central municipal area. The Northeast (both municipal and non-municipal area) and South non-municipal area have the highest response rates among all

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regions, at 63%, 72%, and 70% respectively. Bangkok where people “keep track of finances” the most have the lowest response rate, at only 25%:

Table 4: You have someone in the community who is willing to help when you need it"

Completely agree

Completely

disagree

Not sure

1 2 3 4 5

Bangkok Municipal Area 2% 23% 47% 12% 16%

Central Municipal Area 5% 33% 36% 7% 18%

North Municipal Area 9% 62% 12% 4% 14%

Northeast Municipal Area 10% 53% 21% 2% 14%

South Municipal Area 8% 45% 26% 7% 14%

Average

7% 47% 26% 6% 14%

This result suggests that social cohesion remains very high outside Bangkok, and community-based financial education programs may be more likely to succeed than third-party programs that are run completely by outside experts with no community involvement.

Based on the data, the Central region municipal area appears to be the only region that may require a different approach, since it has both a relatively low percentage of people who keep track of finances, and low social cohesion.

2. Thais do not go to banks for financial advice - except Bangkok residents

On a similar note, FinScope survey also show that “money lenders and persons outside the household” are relied upon the most for financial advice in all regions except Bangkok, where people rely on commercial banks more, and except Northeast non-municipal area, where people rely on Village Fund slightly more.

Village Fund is a considerable source of financial advice for people in the Central, North, and Northeast regions. It is less influential in the South, and has very little influence in Bangkok.

Percentage answers to question, “Apart from family and friends, who do you go for financial advice?” are as follows (below):

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Table 5: "Apart from family and friends, who do you go to for financial advice?"

Community

Leader

Religious

Leader

Commercial

Banks SFIs NBFI

Co-ops/ Farmer

groups

Saving

Groups

Village-

Lenders/ Persons outside

household Others

Bangkok

Municipal Area 4% 3% 26% 12% 6% 3% 1% 2% 19% 24%

Central

Municipal Area 10% 1% 17% 11% 7% 1% 2% 5% 29% 16%

Non-municipal Area 12% 1% 7% 11% 3% 3% 3% 13% 29% 18%

Municipal Area 12% 1% 6% 15% 2% 3% 6% 17% 25% 11%

Northeast

Municipal Area 12% 1% 5% 14% 2% 3% 4% 13% 24% 21%

Municipal Area 5% 3% 18% 15% 4% 6% 3% 3% 22% 20%

Averages 10% 2% 11% 15% 3% 3% 4% 11% 24% 17%

3. Low reach of financial education programs: private banks in Bangkok, SFIs elsewhere

Overall, only 16.9% of all respondents in FinScope survey said that they have attended financial education programs or classes. Of those who attended, SFIs, saving groups, and co-operatives and farmer groups have the highest reach, covering 39%, 29%, and 17% of respondents respectively.

In Bangkok, private banks have the highest reach of all financial education providers, underscoring the fact that their efforts thus far have concentrated on middle-class Bangkok residents.

These figures suggest that there is still a huge potential to expand the reach of existing financial education providers into the rural areas, particularly SFIs and informal groups.

Percentages of those who respond to the question, “Which (financial) training session/finance class/financial literacy program, if any, have you attended?” are as follows (below).

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Table 6: Most Popular Financial Training Sessions

Private Financial Saving Co-ops/

Banks SFIs Regulators NGO Groups Farmer groups Others

Bangkok Municipal Area 25% 19% 8% 1% 12% 25% 10%

Central Municipal Area 8% 36% 0% 3% 28% 25% 0%

Non-municipal Area 3% 24% 0% 0% 26% 30% 17%

North Municipal Area 2% 38% 1% 1% 32% 10% 16%

Northeast Municipal Area 7% 47% 0% 1% 28% 15% 2%

South Municipal Area 14% 39% 2% 0% 13% 30% 2%

Averages 7% 39% 1% 0% 29% 17% 6%

4. Different regions have different ‘priority issues’

Results from the FinScope survey suggest that different regions have different urgent financial needs, which suggest there could be different priorities for financial education programs. For example, people in Bangkok and Central municipal area prefer spending a large sum of money to buy or build a house, which indicates a modern urban environment in which people move in from other towns.

Meanwhile, people in Central non-municipal area and Northeastern municipal area most prefer to use money for “personal consumption,” while respondents in the North and Northeast non-municipal areas say they will use the money to “pay off debt,” suggesting that debt burden is a more urgent issue in those regions than the rest of Thailand.

These geographical differences suggest that financial literacy programs can prioritize different topics for each region. For example, “managing housing loans” may be more appropriate to Bangkok and Central municipal area, “debt reduction” may be more appropriate to rural areas in the North and Northeast, and “consumer loan literacy” may be more appropriate to Central and North regions.

Percentages of those who respond to question “If you were to receive a large sum of money and you could spend it to improve your or your family’s current situation, what would be the first thing you would spend it on?”

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Table 7: Spending tendancies

Buy/build house

Improve house

Start/buy business

Expand business

Personal consumption

Education Purchase vehicle

Pay off debt Purchase other asset

Others

Bangkok Municipal Area

37% 6% 5% 5% 12% 7% 2% 8% 9% 7%

Central Municipal Area

31% 9% 7% 5% 18% 4% 3% 9% 9% 5%

Non-municipal

18% 13% 4% 4% 21% 5% 3% 14% 13% 7%

North Municipal Area

18% 9% 3% 5% 16% 7% 3% 18% 13% 7%

Non-municipal

14% 10% 3% 3% 15% 6% 2% 25% 17% 6%

Northeast Municipal Area

16% 12% 2% 8% 20% 5% 2% 14% 16% 3%

Non-municipal

11% 10% 3% 5% 16% 8% 4% 24% 18% 2%

South Municipal Area

26% 12% 6% 8% 9% 7% 2% 12% 14% 4%

Non-municipal

18% 30% 5% 3% 12% 3% 2% 8% 17% 2%

Averages 23% 12% 4% 5% 15% 6% 3% 14% 14% 5%

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C. Different Demographics, Different Priorities

Although Thais have some common financial behaviors with some notable geographical differences as highlighted in the previous section, we also found from Focus Group Discussions (FGDs) that different demographic groups have different needs, which suggest different priority issues for policymakers.

Of the total of 200 FGDs that were conducted in Nakon Si Thammarat, Chainat, Chiang Rai, Srisaket, and Bangkok, we have chosen four groups to highlight in this report the nature of different priorities as mentioned above: motorcycle drivers in Bangkok, sex workers in Bangkok, hill-tribe and Thai farm workers in Chiang Rai, and Muslim wage earners in Nakon Si Thammarat.

For motorcycle drivers and sex workers in Bangkok, the key issue for both groups is how to expand financial access – allowing “motorcycle team jackets” to be used as loan collateral in the first case, and removing social taboo and changing banks’ policies in the latter. Improved financial access will then provide new opportunities to integrate financial education programs with product delivery. For these demographics, topics such as debt management and budgeting are less urgent, because they can earn regular income in the city and face less calamitous risks compared to low-income Thais in the rural area.

On the other hand, rural area residents, such as low-income farm workers in Chiang Rai and Muslim wage earners in Nakon Si Thammarat, have higher need for targeted financial education initiatives about debt management, saving and budgeting, because they have low and irregular income and face considerably more risks, e.g. crop failures and natural disasters, which result in many people having problems with debt and are unable to save.

Profiles of four sample demographic groups from the FGDs mentioned above are summarized below.

1. Target for increasing financial access: taxi and motorcycle drivers in Bangkok

Taxi and motorcycle drivers in Bangkok who participated in the FGDs use a wide range of financial products including the following:

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Table 8: Increasing Financial access for Taxi and Moto Drivers

Financial product

Channel Usage and frequency

Loans Finance company, taxi co-op, fellow motorcycle drivers

Finance companies

Informal lenders, neighbors, relatives

For buying a car/motorcycle

When buying household appliances

When cashflow is short or cannot borrow from the above sources

Deposits Private banks (SCB, KBANK, KTB, BBL), government banks (BAAC, GSB)

Everyone has deposit account at various bank and ATM card. They deposit 1-2 times a month and regularly withdraw money.

Remittance Western Union, EMS (post office), private banks (via ATM machine)

Many participants use ATM machines to transfer funds back home in the countryside to their elderly parents. They try to do it every month.

Insurance Ocean Life, Muang Thai Life

Two participants say they have taken life insurance policy (say it’s their wife’s idea so they don’t know the details.)

Experience with financial products

Participants generally have a good impression of financial services they have used. They cite Kasikornbank especially as having a very good and kind service (e.g. bank employees wai them (show formal respect) when they go to the branch, and help them fill out the forms).

In general, participants say it is hard for them to understand terms and conditions of financial products. They just deposit to withdraw quickly. They don’t know how the bank calculates interest and principal; they just pay whatever amount the invoice says. But they believe that banks would not do anything to hurt their interest.

Complaints voiced by more than one participant are as follows:

Slow service: a few people say they stopped using KTB (Krung Thai Bank, a government-owned commercial bank) because of very slow service. They don’t think it’s a big deal because they can switch to other banks.

“Tricky”: in general they say banks treat them fairly and are confident that banks don’t do anything illegal, but they say banks are “tricky” because sometimes they have to pay service fees or other kinds of fees that they didn’t know before.

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Discrimination: some participants say that they don’t like it when bank branch service rich and regular clients first; these people don’t have to wait in line for service. They feel it’s a kind of discrimination.

Use of personal information: in general, participants aren’t worried that the banks will use their personal information without their consent, because they have low income so they aren’t a likely target of “con-men”. However, several participants say that even though the banks by policy may not disclose their personal information, one cannot trust bank employees not to do it; they say they have received a few fraudulent phone calls that try to get them to transfer money.

Unfairly high interest rate: taxi drivers say they think 8% interest on car leasing is too expensive, because their cars cost up to a million Baht. They wonder why leasing taxis is more expensive than typical car loan, since they drive taxi to earn income, while a typical car is not used specifically to make money. (Note: They don’t have enough money to pay for down payment).

Basic financial literacy

Almost all participants in this demographic answer basic division question correctly. Almost everyone understands the concept of “inflation” and impact of inflation on their spending power. Almost everyone answers the savings interest and principal question correctly (i.e. how much money will be in your savings account after 5 years).

Money management

Motorcycle drivers have income net of expenses from driving their motorcycle of roughly 400-500 Baht per day. Many motorcycle drivers also take messenger jobs (courier), making 200 Baht per trip. Overall they may get income of as much as 15,000-20,000 Baht per month. Most people’s spouses also work, e.g. as a 7-Eleven clerk (9,800 Baht monthly salary), office worker (10,000-12,000 Baht salary), factory worker (300 Baht daily wage) and so on.

Taxi drivers say they have income net of all expenses (including NGV fuel costs) averaging 200-300 Baht per day. Some people have to pay taxi leasing expense 500-900 Baht per day, divided up between owner of taxi co-operative and leasing company.

Almost everyone in this demographic live in a rental house or apartment with monthly rent of about 2,000 or 3,000 a month including water and electricity. They say they have monthly expenses that exceed 10,000-12,000 Baht every month: the largest expenses are 1) child rearing (food and allowance for children cost over 5,500 Baht a month), followed by 2) car lease, 3) monthly rent (3,000 Baht a month) and 4) food and fuel (over 300 Baht a month). Many people say they try to send money back to family in the countryside of about 6,000-8,000 every month, and save the rest.

Roughly half the participants say they manage to save every month, roughly 1,000-3,000 Baht a month. Two participants save by paying insurance premium 4,000 Baht per month to Ocean Life and Muang Thai Life insurance respectively. Each month they might be 4-5 days “short,” for which they will borrow among themselves to fill the gap, as the first priority.

Two participants say they record income and expenses regularly to reduce unnecessary expenses. Other people say they don’t do it because their income is uncertain, and as soon as they get money it must be paid out in expenses.

Everyone has deposit account at banks and ATM card.

Loans management

Everyone except one (who uses his own car as taxi) has car/motorcycle loans which they have to pay on a monthly basis. Almost everyone say they take out consumer loan to pay for various household goods. Two people say they took out loans from informal lenders to meet cash flow

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gap in daily life, paying him 10% interest per month. Almost half the participants have borrowed from relatives and acquaintances.

The main reason they borrow from relatives or informal lender is that formal financial institutions are “complicated” and demand salary slip or other proof of income which they don’t have. The only evidence they have is deposits at banks, so they feel that should be sufficient.

They say they will borrow from banks only for big things like building a house or buying a car. One person says he borrows from his father from time to time, when he needs money, roughly 10,000 Baht each time. The motorcycle drivers suggest that banks should take their queue jacket as collateral, because you need to buy the jacket to do the job, and the price can be as high as 500,000 Baht in areas with a lot of passengers (the area where the price is that high is Lad Prao, in which drivers say they hear people make 1,000-2,000 Baht per day).

Almost no-one in the group can tell what interest rate he/she is paying on various loans, saying that they just pay whatever amount the lender tells him/her to pay.

Nobody in the group feels they have too much debt. They say that people who have huge problems with debt are the ones who are irresponsible with their own behavior; it is mostly their own fault, or accidents beyond their control. They said sometimes they paid late because of getting sick or the car broke down, but informal lenders don’t mind because they pay back 1-2 days later. But if the borrower yells at or bad-mouth informal lender, he will be physically hurt. The group is confident that they will continue to borrow from informal lender and don’t think they will ever have over-indebtedness problem.

2. Target for increasing financial access: sex workers in Bangkok

“People in this job don’t pay in installments. We just save up and go pay cash.” – Shane, male sex worker in Patpong

“If I don’t make money today I can get it tomorrow; it’s not a big deal.” – Tata, male sex worker in Patpong

Two FGD group participants are sex workers in Patpong area of Bangkok who cannot access loans from formal banking institutions due to illegal nature of their jobs. They also say they would prefer using cash even if they could apply for a credit card, because they get cash every day and credit card charges interest.

They use the following financial products:

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Table 9: Financial products & services used by Commercial Sex Workers

Financial product

Deposits Private banks (BBL, KBANK, SCB etc.)

Once a month for time deposit accounts, otherwise vary depending on how much money they have left every month.

Loans Informal lender

Patpong has a mafia informal lender who’s been in this business for 20-30 years. They charge 20% interest a month. Many participants have borrowed from this source in the past.

Remittances EMS (Thai post office), Western Union

To wire money back home to elderly parents and children.

Insurance Life insurance (AIA)

A few have life insurance policies.

Experience with financial products

Participants express the following dissatisfactions regarding their experience:

Impolite bank personnel: about one quarter of all participants cite that they have been looked down upon by bank personnel, especially when they go to the bank in their working clothes (colorful outfits etc.). Two participants said they have been told “this bank doesn’t accept deposit from sex workers” to their face (Kasikorn Bank, Patpong branch).

ATM limits: participants say they don’t understand why banks have to limit the amount of cash they can withdraw to 20,000 Baht per time, and limit deposit to 150,000 Baht per day.

Almost all participants in this demographic answer basic division question correctly. Only two people have heard of the term “inflation” but everyone answers correctly that if things are more expensive next year, then they will be able to buy fewer things. Roughly four-fifth answered the savings interest and principal question correctly (i.e. how much money will be in your savings account after 5 years).

Money management

All participants are sex workers based in Patpong area. They only work at night as bar girls, male prostitutes, and drink sellers. Most sex workers come to Bangkok from other provinces, mostly Esarn e.g. Nakon Ratchasima and Srisaket. Almost all female sex workers are single moms. Most of their children are still in school. Everyone is key breadwinner in the family; they have to remit money back home to take care of their elderly parents and/or children. So they

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say they are very careful when spending money. Typically they think about the use, necessity, and compare prices before buying. They have income no less than 25,000 Baht per month. One participant says in a “good month” she can make up to 80,000 Baht. Male sex workers say the best period is festival such as Songkran; during those times they make up to 60,000 Baht a month.

Major expenses for most people are food, rental, and remittances home. For female sex workers, children-related costs including education cost almost 20,000 Baht per month. In addition, two participants spend quite a lot of money every month on underground lottery. (They have 100,000 Baht and 50,000 Baht respectively; see section “loans management” below).

Only two participants (one male, one female) record expenses and income regularly every month, in order to plan ahead and see where their income and expenses come and go. Many people say “I don’t dare to record; when I see all those expenses I feel stressed. Also I’m lazy to do it.” However, most say that even if they don’t put it down on paper, they do plan what to spend every month systematically. Sometimes they can’t achieve the goal they set because there are fewer clients than they expected, or because of some unexpected events which cost money, such as they or relatives suddenly get sick.

Only one participant in the group says she has no savings because she has too much gambling debt (underground lottery). Other people say they save with private banks every time they can. One person with small children says she deposits at least 1,000 Baht every month for them. Those who have 25,000-30,000 Baht income per month say they try to save at least 5,000 Baht.

Major reasons for saving are 1) to help folks at home who have financial difficulties, 2) to prepare for emergencies, especially medical emergencies, and 3) to save up for children’s education.

Loans management

Everyone has debt obligation, but for most people it’s not their own debt but their parents’ debt. One person has to service informal debt for his parents; right now the amount outstanding is 30,000 Baht. Another person pays 40,000-50,000 Baht debt service per year to BAAC (she borrowed in her parents’ name) and has 300,000 Baht loan outstanding. When asked about the interest rate, many people say they are not sure about interest rate; they only know how much to pay every month from the monthly invoice. Two female participants have debt from gambling (underground lottery) amounting to 100,000 Baht and 50,000 Baht. They have to pay 10% interest per month until the entire amount is repaid. They said their reason gambling debt is so high is that when they lost money the first few times, they bought more lottery hoping that their luck would turn around, but it never did.

Many participants in the group have had experience of borrowing from informal lender in Patpong area which has 20% interest per month. They view the need for informal loan as “normal” because “sometimes you are just short of cash.” There is one dominant mafia who makes sure every lender in the area charges the same interest.

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3. Target for “debt management” education: farm workers in Chiang Rai

"The more the children, the more the money you need to pay for their education," said Jagui, who has four children.

"You need to be someplace dry when it rains, and that someplace is your home," said Alupae.

"You cannot have a home without a wife," said Lisaw, a Lahu villager.

Most farm workers in Chiang Rai who participated in the FGDs became farm workers because they do not have their own land. Hill tribe farm workers work for fellow hill tribe plantation owners as farm labor; Thai farm workers work in fruit orchards, corn fields, etc. They only work in planting and harvesting season of each crop, e.g. coffee, lychee, cherry, macadamia nut. Women who work in fields get paid around 180-200 Baht per day, while men who get paid to cut grass receives about 400 Baht per day because it is hard labor. The few who have their own land grow corn, lychee, longan, raise pigs, etc., but the yield is not very good. They use the following financial products:

"You can be so upset from anything, but if you come home at the end of the day, things turn all right again," said Amee, a widow with two grown-up children.

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Table 10: Financial products and services used by Farm Workers

Financial product

Loans BAAC

Village fund (Thai workers)

Relatives, neighbors, informal lenders

- Borrow for agriculture

- Borrow from neighbors or relatives for urgent needs, small loans, and to refinance BAAC loans

Deposits None They say they don’t have enough money left to save

Life insurance BAAC + Ocean Life Insurance

BAAC told them that they have to take out life insurance policy when they borrow

Experience with loan products

Overall most participants feel that they have been treated reasonably well by financial institutions. Some say they have a good experience with Wawee Branch of BAAC; lending officers are nice and read loan terms out loud to them (some people in these groups are illiterate), and suggest that they try to pay interest on time, leaving principal repayment for later. BAAC also have some loan officers who can speak Lisu and Aka language, so they can explain to hill tribe customers. Some people complain that BAAC transactions take too slow; often they have to waste whole day when they go to the bank, making them lose income since they work as day laborers.

A few Lisu participants complain that BAAC officers don’t treat them well, acting impatient and looking down on them. They feel it’s because they are not Thai nationals and cannot speak fluent Thai.

Most participants say they have too much debt, because existing debt from BAAC and village funds “make losses” rather than make money, because they have faced many problems in the past years that affect their crop, such as drought, poor quality soil, mold, and very low price (offered by the middlemen). They are too afraid to borrow more loans for further investment to repay old loans, for fear of further losses.

Some participants say that over indebtedness is not something that “people tell others” because it’s a personal problem, unless you are very close to the person. Some also say that they don’t think they will ever have “too much debt” because they have low repayment capacity due to uncertain income streams, so it would be difficult to borrow in the first place.

Roughly ten participants say that language is a problem for them, because they cannot read and write, so they have to rely on their children to help read. They say BAAC should provide

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more hands-on help so that they can better communicate and reduce problems that arise from misunderstanding.

Roughly six Lisu participants say that they are interested in village fund as well, but they cannot access it because this fund in their village is controlled by Aka tribe, which used to have bad relationship with Lisu tribe, so they did not bother.

Roughly half of all participants in this demographic answer basic division question correctly, and they answer after consulting each other first. No-one has heard of the term “inflation” but most answer correctly that if things are more expensive next year, then they will be able to buy fewer. Roughly one third answered the savings interest and principal question correctly (i.e. how much money will be in your savings account after 5 years); people who can’t answer say it’s because they never have a savings account.

Money management

Income from farm labor fluctuates depending on the planting and harvesting season of each crop. Participants say usually they don’t have enough money between January and April every year, which is the period after harvesting and before the next planting season begins. Most participants say that they try to spend only as much as necessary, such as buying food. But often when they don’t have enough money, they have to borrow or work hard labor (e.g. cutting grass) in exchange.

They would like to save but it’s very difficult to save up because they get income on a daily basis, about 200 Baht per day. On some days when there is no work, they don’t earn income and have to use what they manage to save from the previous day, so they have no big savings amount. They say they will try to live in a self-sufficient way, e.g. eating only food they grow themselves, rather than borrow.

Some participants say they bury what little money they manage to save, because when they really need the money they can quickly dig it up. If they go make deposit at a bank, it’s very cumbersome and costly because the branch is far away, and the branch may be closed on the day they need the money.

Participants say having irregular income means they don’t know how to calculate how much they make last month, and no-one does budget or record their income and expenses. They only know that once they sell vegetables or fruits, they are left with almost no profit. Some say they don’t want to record income and expenses because they will see a lot of expenses and little income, which is depressing. Most of their monthly expenses are for food, electricity bill, children’s education, and religious rituals. Among these, education expense is the biggest item. Monthly expenses average around 3,000 Baht.

Loans management

A few participants have loans from BAAC to invest in their own agriculture. Some have not been able to harvest so BAAC suspended principal repayment for them, requiring them to pay only interest. One participant borrowed from BAAC to pay for medical expenses for his sick son. They cannot recall how much interest expense they have to pay, saying that BAAC will send monthly invoice to their homes and then they will know how much to pay. One participant borrowed interest-free from his mother-in-law, but have not been able to pay back (he prefers to borrow from BAAC, but was unable to find another 6 people to form group loans because everyone he knows already formed groups).

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Some participants who have no loans say they don’t dare to borrow because they have to pay interest on the loan, and luckily their children are grown up and send them money every month from the city.

4. Target for “saving” education: Muslim wage earners in Nakorn Si Thammarat

Muslim participants joined several FGDs in Nakorn Si Thammarat, and four FGDs were all-Muslim groups. Most of participants are women of 25-60 years old with mixed careers. In one group, participants included daily wage earners, a salary worker, and owners of rubber farms who employ daily workers. Average income of the group is about 10,000 Baht per person per month.

Participants in another group have jobs related to fishery (daily wage earners and own business: making and selling ice, seafood, seafood products). Average net disposable income of the group is about 7,000-15,000 Baht per person per month

(revenue 15,000-25,000 Baht per month, less 30-40% costs of running own business). Participants say their income is not stable, but cyclical with a drop every 2-3 months due to the seasonality of fishing business. They attempt to set aside excess income for use in low-income periods, but can only manage to save about 5,000 Baht per year.

An important characteristic of Muslim households is that the household is relatively large, at least 4-6 members, ranging from children to elders over 65 years old. Income is used mostly for daily consumption. Food and daily expense for babies and children are major expenses. Women seem able to allocate their limited budget for daily consumption and saving for urgent consumption quite well. However, they do not have much savings. Small amount of saving is made possible with Village Fund. Whenever people can manage to save larger amount (over a thousand Baht), they prefer to make a deposit at banks.

Product preference

Convenience in terms of distance from their home is considered one of the most important criteria for choosing financial service providers. Therefore, participants of the FGDs prefer community-based MFIs (Muslim saving groups, village funds, one-Baht sajja) to commercial banks, which lie further away. GSB and BAACs are also popular since officers come to provide services right inside the village. They are closer and have better attitudes toward low-income clients than commercial banks.

Despite Sharia law restrictions, Muslim people in the FGDs say they will use services of any financial institutions regardless of religion. They say they have many choices from many kinds of financial service providers. It is easy to borrow and banks need to please customers. However, the participants are not familiar with credit cards. Even though they think credit cards make things easier, they are afraid of spending beyond their means and losing credit if they cannot repay in time. “Debt” is seen as a heavy burden if it is not necessary. Some people say they used to be over-indebted in the past, but not now because they “learnt how painful it is.”

Most participants of FGDs use services of Village Fund and pay 5% as ”service fee to support the group, rather than paying “interest” for opportunity cost of borrowing money. This rate is common (the same for several FGDs). 500 Baht will be deducted from 10,000-Baht loan up front as a “service fee”; borrowers will receive only 9,500 Baht.

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Like most people in Nakorn Si Thammarat, Muslim FGD participants use the term “playing” to refer to “saving and borrowing” activities with any MFIs. This word connotes gambling, which implies that they try to make best use of money to earn maximum returns. Most of them are members of ROSCAs, which they said it is a kind of “saving” that yields reasonable returns and it is helpful when they need a large loan.

People in Muslim villages have similar behaviors as Buddhist Thais in nearby village when it comes to managing their money. Apart from ROSCAs, everyone buys “Oishi” soft drink brand, just to get a bottle’s lid and send it in for sweepstakes, for a chance to win gold prizes. When they hear someone in the village won gold, everyone will buy “Oishi”, expecting to be just as lucky. Pawnshops are also popular.

In short, we can observe a wide range of financial behaviors in Muslim villages in Nakorn Si Thammarat. Financial services are provided by small creditors, lenders, or merchants in a village, not loan sharks.

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IV. KEY FINDINGS AND RECOMMENDATIONS

This section will summarize some of the key findings of this report and also provide key ideas that can serve to develop strategies to build the financial capabilities of low-income Thai households.

A. Policy Level Recommendations

After analyzing both the supply and demand side findings, the following policy-level recommendations are offered to increase the financial capabilities of the Thai population and ultimately enable them to benefit from increased access to diverse financial products and services in the market.

1. Create an oversight mechanism

The oversight mechanism could include SFIs/VF/ CBFIs, commercial banks, NBFIs, mobile network operators, payment agents, insurance companies, bank or insurance associations. The oversight mechanism would create a three-year rolling strategy and annual work plans.12 The rationale for establishing an oversight mechanism is to not only to operationalize a national financial education strategy, but also to foster continuous learning among the various stakeholders and to serve as a point of contact with engagement with international initiatives support financial education and consumer protection.13 The current Working Group on Financial Literacy could be a starting point towards establishing an oversight mechanism.

2. Create a Financial Inclusion Innovation Fund managed by the oversight mechanism. The purpose for creating an innovation fund is to catalyze both private and public sector organizations to conduct research, innovate and pilot test new approaches to financial education that are appropriate to the Thai context. The fund could implement a competitive grant process to solicit applications that are scored based upon clear and transparent criteria, in line with global best practices.

The competitive grant process could fund activities such as:

Design, development, and launch of social marketing/behavior change campaigns that involve both above the line and below the line activities;

Design, development and launch of marketing and sales toolkits for specific financial products and services which incorporate financial education messages;

Support financial services providers such as SFIs, commercial banks and insurance companies to develop tactics to reinforce uptake and usage of financial products and services;

Design, test and launch technology solutions to reinforce positive financial behavior, for example, SMS reminders to encourage regular savings;

Design, test and rollout out simple tools to help SFIs/VF/CBFIs/ banks to better disclose pricing to existing and potential customers to allow for comparison shopping.

In terms of governance, the following organizations could be considered: FIPD/FPO, BOT, OIC.

13 Some global initiatives could include: The Smart Campaign, Citi FT Financial Education Summit, Global Financial Education Program, etc.

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3. Develop financial education/social marketing programs to highlight the risks of over-indebtedness from consumer credit. TV dramas have a high potential to build awareness of these issues. There is a major opportunity here to bring over-indebtedness into the open - this is where social marketing campaigns will probably be most effective. In terms of actual financial education - the emphasis on CBFIs linked to SFIs such as BAAC and GSB and KTB offer a ready channel for delivering on-going financial education.

B. Implementation and Programmatic Recommendations

The supply-side diagnostic revealed that Thailand has a diverse range of financial education providers offering training and other educational formats to divergent target audiences, all with the aim to improve financial literacy. Global experiences and emerging best practices in Thailand need to be studied and applied. A summary of program delivery recommendations are listed below than can be applied by financial education providers seeking to implement more robust and effective programs.

1. Develop programs with a single target audience (segment) in mind

Too many programs are developing education and campaign materials that are ambitiously trying to reach too many audience segments. Each program should be designed for a specific target audience, so that content and campaign tools truly resonate and trigger financial behavior change. Several models are currently targeting low-income or disadvantaged groups and are good examples of designing programs for a specific target audience. Kenan Institute of Asia has focused its program on reaching at risk women in slum areas in Bangkok, and will be launching a new program targeting women at correctional facilities. Khom Loy Foundation targets ethnic Burmese migrants in Mae Sot. The Thai Health Foundation targets its financial education activities for garment factory workers and is adapted to the needs of women who are earning salaries. Each of these three programs has adapted their curricula to reflect the cultural and social context, as well as the education levels of their beneficiaries. Similarly, geographical differences uncovered in the demand side research suggest that financial capabilities program about “managing housing loans” may be more appropriate to Bangkok and Central municipal area, “debt reduction” may be more appropriate to rural areas in the North and Northeast, and “consumer loan literacy” may be more appropriate to Central and North regions. They should be monitored by the recommended oversight body to glean lessons learned and to enable wider replication.

2. Support the design and implementation of consumer protection campaigns sponsored by BOT’s Financial Consumer Protection Center

The Bank of Thailand’s (BOT) Financial Consumer Protection Center plans to develop a financial education campaign. If done well, this can serve as a model for other financial education programs. BOT are currently designing campaign materials targeting low-income target audiences focusing on debt management and fraud prevention. They should articulate a cohesive strategy that includes specific target audiences for the program, key educational messages, the delivery channels or communication channels that can reach this audience, resources available, a monitoring and evaluation system to judge effectiveness and an operational plan. Local and global experiences in designing social marketing campaigns could be applied to this context.

In addition, BOT should ensure that consumer protection agencies are committed to financial education and helping families avoid the debt trap and to monitoring the effectiveness of their programs. Another area of involvement could be for BOT to partner with consumer rights/protection agencies in Thailand, such as the Credit Card and Personal Loan Debtors’ Club., The Personal Loan Debtors’ Club has over 70,000 registered members on their website, and the debt counseling program is conducted by debtors who had their own problems with debt

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in the past. The Club has very limited scale due to every director and key member working on a voluntary basis, but their commitment and drive should be harnessed.

3. Leverage GSB and BAAC large distribution network

There is a huge opportunity to leverage existing delivery channels such as BAAC to build the financial capabilities of a large number of low-income rural individuals. BAAC’s branches are virtually ubiquitous in Thailand especially in the rural areas. BAAC currently teaches budgeting and could do more by adapting budgeting curricula and tools to reflect the financial behaviors of farmers. (e.g. take into consideration seasonality, farm and off-farm incomes, etc). In addition, since BAAC is a bank, it can develop improved loans and savings products and also help farmers understand how to use a more tailored mix of bank products and services as well as new technologies such as mobile banking. They can also use their learning centers to better advantage, linking to mass media such as TV and radio, and considering partnerships with Ministry of Agriculture to develop a financial education packages tailored to specific rural user groups.

Similarly, GSB is in a unique position to build the financial capabilities of a large number of low-income, urban individuals. With over 1,000 branches, they are well positioned to teach budgeting and could adapt their tools to the financial behaviors of micro-entrepreneurs, blue-collar workers, or other low-income target audiences. In addition, as a bank, GSB can also develop more appropriate loans and savings packages and help the target audience(s) understand how to use an expanded array of bank services, including new technologies such as mobile banking.

The joint program of BAAC and GSB called the Debt Doctor program (please refer to Error! eference source not found.) desperately needs a clear program strategy. The strategy should include the definition of target audiences for the program, key educational messages, delivery channels, a monitoring and evaluation plan and an operational plan. The strategy should closely examine what has been working and what is not working in this program, including finding a way to pay a stipend for the Debt Doctors as promised or developing a business plan to ensure the program is financially viable.

4. Train and incentivize financial institutions to play a role in building customers capabilities

Financial institutions can be convinced to see the value of incorporating financial education into advertising, marketing, sales and customer service tactics. More specifically, commercial banks and insurance companies that are beginning to penetrate low-income markets could be persuaded to view financial education as an integral part of the customer journey. Global examples in mobile money are showing that sales agents, retailers and merchants play a critical role in educating consumers not only on the steps necessary to transact and also in helping customers to register and try the service.14 In Tanzania, Vodacom recognizes that marketing is not enough to get money money “off the blocks.” (See Box 7: Customer Activation in Tanzania). In India, FINO Tech Foundation relies on business correspondents called bandhus on the benefits of personal savings and how they can save more using biometric cards through point-of-sales devices. (See Box 8: Global Example, Diverse Providers to Delivery Financial Education in India.)

Davidson, Neil and M. Yasmina McCarthy. Driving Customer Usage of Mobile Money for the Unbanked. GSMA.

2011, Page 19.

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Box 7: Customer Activation in Tanzania

When asked to reflect on lessons learnt while rolling out M-PESA in Tanzania, one Vodacom executive cited the important of customer education. He said that above the line marketing is not enough to get mobile money “off the blocks” and that a lot of effort must be invested to get people comfortable with the idea of transferring money using their phones. Indeed, he estimated that it takes at least 30 minutes of personal interaction (with a transactional agent, a field agent, or a friend or family with M-PESA) to get a new customer to understand how to use a mobile money service.

- Adapted from Davidson, Neil and M. Yasmina McCarthy. Driving Customer Usage of Mobile Money for the

Unbanked. GSMA. 2011, Page 19.

Box 8: Global Example, Diverse Providers to Delivery Financial Education in India.

There is growing consensus in the mobile banking industry, that financial education/ consumer education is an integral part of the customer journey to increase uptake and usage of mobile banking services. FINO Tech Foundation in India is leveraging its extensive network of business correspondents called Bandhus to teach low-

income clients how to make the most of the financial services linked to their biometric cards using financial education tools such as interactive flip books and posters. These business correspondents offer training on the benefits of savings and making savings plans and also how to transact using a biometric card and point of transactions (POT) machine. Importantly, FINO went to considerable lengths to customize their FE practices to their target audience.

5. Leverage popular media channels such as TV and Internet

Mass Media in Thailand in particular TV and print media, could provide promising opportunities for improved financial education. The wide use of mobile phones and tablets (such as iPads) in Thailand could also spark experimentation with new formats to convey financial education messages and encourage the application of new skills. Some idea starters include mobile phone games, applications, and video clips that can be played on tablets when bank staff are engaging with potential customers. In Kenya, Makutano Junction is popular television that incorporated financial education topics. (See Box 9: Global Example: Teaching with TV drama, Kenya)

Box 9: Global Example: Teaching with TV drama, Kenya

Under the DFID Financial Education Fund, Mediae integrated financial education topics into a long-running popular television program called Makutano Junction. Aired during a primetime slot, data indicated that the exposure amounted to 7.2 million Kenyan viewers and additionally 2 million in neighboring Tanzania and Uganda. In two consecutive series of Makutano Junction, the educational TV drama covered banking practices, budgeting, savings and investment. After these episodes were aired, viewers were more interested in learning about how these services could benefit their lives. An end-line survey found that 70% of the target audience proved their formal banking membership, which was up from 60% at the baseline.

Figure 8: 'Makutano Junction' episode

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In New Zealand, a popular website receives 1.6 million unique monthly visits to track budgets and assist with financial planning.15 (See Box 10: Global Example, Mint helps track Spending in New Zealand

Box 10: Global Example, Mint helps track Spending in New Zealand

6. Leverage existing community structures to delivery financial education

There is high potential to scale up innovative programs that have a strong local community engagement structure. Thailand Research Fund integrates its program with the community governance structure, e.g. by involving elected local government leaders (or bor tor) at sub-district level (tambon) from the onset, and can be scaled up with more support. Since their model requires minimal outside support once the train-the-trainer process begins, this can be replicated by local structures. Currently, TRF assists with general farm household accounting, but in the future they can adopt or take on new topics that reflect the needs of the target audience(s).

7. If a training format is used, keep messages simple

Training programs that focus on conveying theory using lecture-based methods usually do not result in triggering financial behavior change. More organizations globally are using a ‘Rules of Thumb’ approach to training and focusing educational content around one or two key desired actions instead of focusing on theory. Other methods to trigger change might be to apply adult learning principles and practices into training methodologies. This means that training should be relevant to the participant's day-to-day lives, allow sufficient opportunities for participants to practice new skills or “learning by doing” and should focus on themes that participants can apply immediately after a training. In Dominican Republic, a financial education program that focused on basic “rules of thumb” showed positive impacts compared to a theory-based program. (See Box 11: Global Example, Keeping training messages simple).

8. Content should not only focus on household management (budget) but should also be linked to the benefits and how to use available financial products and services

Financial education is more than teaching people about budgeting their money and keeping a household account. Most programs cover basic budgeting, savings and investment. Programs

See www.mint.com

Mint is a free website that helps young professionals manage their budgets. Mint records and analyzes users’ spending patterns by extracting data from bank, credit card, savings and other accounts. Mint uses seamless technology for example – graphics are easy to read and interpret, making budget analysis accessible to a wider population. Mint sends out weekly email alerts to remind users their spending must be checked, credit card splurges controlled.

Adapted from Blanton, Kimberley. Financial Literacy on the Web, Spring 2011, http://crr.bc.edu/wp-content/uploads/2012/04/Financial-Literacy-on-the-web.pdf

Figure 9: Mint.com screen shot

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that reach middle-class office workers mostly concentrate on retirement planning and saving for investment. Programs that reach rural households mostly concentrate on basic budgeting. Many topics are not currently covered. Debt management, risk management & insurance, consumer protection, 16 bank services, financial negotiation, and remittances are all currently under represented or not addressed at all in currently utilized financial education curricula.

Box 11: Global Example, Keeping training messages simple

9. All Financial Education campaigns and programs should have outcomes measurement

None of the programs reviewed as part of this research have implemented any rigorous outcomes assessment or evaluation, and most have not completed even basic monitoring work beyond simple inputting of records (e.g. how many people have been trained). It is therefore difficult to assess the effectiveness of each program based on currently available evidence.

There are, however, two notable monitoring initiatives currently underway as part of the financial education projects reviewed in this report. The first initiative from TRF utilizes the tambon-level FE teams the organization relies on to deliver its FE services. The teams are trained to regularly monitor how many families use budgeting, and later, the teams conducted a survey to assess how many people were able to improve their financial situation as a result of TRF’s services. Current information generated as a result of this research initiative shows that approximately 10% of households reported better household finances after using household account books. Over 41,000 households use it regularly.17

The second organization currently undertaking effective monitoring of its FE programming is Keenan Asia. Keenan Asia conducts a baseline test prior to their FE intervention as well as a post-test for comparative analysis. To supplement this information, Keenan Asia conducts follow-up interviews with their target audience (at risk women) to assess the impact.

Globally, there is increased attention to fund and explore the impacts of financial education on changes in financial behaviors and over-all economic well-being. In South Africa, an evaluation of a financial education program that used local radio showed An evaluation of this radio program found significant changes: 11 percent increase understanding the importance of saving, 48 percent of listeners who opened a savings account, 47 percent joined a local informal

Notable exceptions being the Bank of Thailand and Credit Card and Personal Loan Debtors’ Club

17 Interview with Silaporn Buasai, Programme Director, Programme on Community Research, 10. Thailand Research Fund (TRF), August 27, 2012.

Using an experimental design, an IFC research team found important differences between trainings that focus on understanding concepts versus depth of understanding. Participants in the study are randomly assigned to one of three groups: Accounting, Rules of Thumb or the control group where no training was held at all. Clients in the Accounting group participated in a training that offered a traditional, principles-based course in basic accounting techniques compared to the Rules of Thumb course, which focused on simple rules for financial decision making with an emphasis on the need to separate business and personal accounts.

Key findings showed that Rules of Thumb clients successfully applied their new skills more than participants in the Accounting group. With basic rules learned in the Rule of Thumb trainings, clients were better at saving as well as separating business and personal cash and accounts, keeping accounting records, and calculating revenues. The clients who performed better overall also had more education before participating in this training. Two other interesting patterns that emerged show that training fees are a significant challenge to low-income target groups; additionally, trainees who had frequent follow-up visits were less likely to adopt financial skills taught in their course.

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saving group (called stokel), and 25 percent rise in listeners paying bills on time. See Box 12: Global Example, Financial Education through Mass Media, South Africa). In Kenya, financial education delivered through training workshops to MFI clients resulted in increased knowledge of key financial topics and less risk financial behaviors. See Box 13: Impact Evaluation, Understand your Money, Kenya).

Box 12: Global Example, Financial Education through Mass Media, South Africa

Most effective financial education must be relevant to target audiences and delivery in the local language is key. Since radio was the medium offering the widest coverage in South Africa with over 90% of population regular listeners, it was be best way to deliver key financial literacy messages. The Financial Freedom program in South Africa did this by broadcasting their program over the radio in four local languages. An evaluation of this radio program found significant changes: 11 percent increase understanding the importance of saving, 48 percent of listeners who opened a savings account, 47 percent joined a local informal saving group (called stokel), and 25 percent rise in listeners paying bills on time.

Box 13: Impact Evaluation, Understand your Money, Kenya

A greater focus on rigorous evaluations has shed more light on what has worked well in financial education. Results from these evaluations have also shaped how donors and program implementation teams improve strategies, adjust delivery and integrate regular program assessments. One telling example is an innovative program called “Elewa Pesa” (Understand Your Money), piloted by a microfinance company called Faulu Kenya with support provided by DFID’s Financial Education Fund. With an adult-friendly curriculum, professional trainers provided financial education through training workshops complemented by DVD clips, comic strips and worksheets, followed by interactive coaching sessions with Faulu loan officers. An impact evaluation showed successes for training participants, bank staff and management. Trainees demonstrated an increased knowledge of key financial topics, less risky financial decisions and improvements in behavior. Faulu staff were also more involved in developing the utilized curriculum, better equipped to answer clients’ questions, more engaged in coaching and advising them, and even saving more themselves. These positive changes encouraged Faulu senior management to value financial education; and now, financial education has become a part of their business model and marketing strategy.

The IFC conducted two surveys in India and Indonesia showed that providing households with small subsidies actually triggered people to open a savings account. See Box 14: Global Example, Subsidies Prompt Savings, Indonesia and India.)

Box 14: Global Example, Subsidies Prompt Savings, Indonesia and India.

Using two surveys from India and Indonesia, a World Bank supported study presents evidence that financial literacy is an important predictor of financial behavior in the developing world. Results demonstrated that financial literacy education has no effect on the chances that participants would open a bank savings account, but the training did increase knowledge about financial concepts for households who started off with low financial literacy and education. For households who received small subsidies, they were more likely to open a savings account. With larger subsidies, more than 9% households opened a savings account. This suggests that either subsidies or reduced price of services may represent a cost-efficient approach to expanding services to the unbanked, which would be an alternative to less effective financial education programs geared for the general public.

Short-term technical assistance could greatly help financial education implementers seek solutions to the operational challenges they are encouraging. Most programs are developing training based financial education programs, but with technical assistance they could explore alternative delivery channels and produce alternative financial education toolkits that use other engaging formats such as comic books, video clips played on iPads or computers or mass media channels. Many organizations cited that building the capacities of trainers (to use training guides and tools correctly) was a major challenge, especially since some rely exclusively on volunteers. Short term technical assistance can help implementers come up with practical solutions to train trainers and facilitators how to use tools, how to teach adults, how to engage in dialogue, how to tell stories, how to ask questions, how to provide counseling services. Another area where short term technical assistance could add value is to help program implementers design monitoring and evaluation systems so they measure their success and also refine their programs.

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APPENDIX 1. LIST OF KEY INDIVIDUALS INTERVIEWED

Provider Interviewee Title

Foundation for Consumers Sari Ongsomwang Director

Bank of Thailand Chanatip Jariyawiroj Director, Financial Consumer Protection

Center

Credit Card and Personal Loan Debtors' Club

Chuchart Boonyongyos

Club President

Thai Bankers’ Association Dr.Twatchai Yongkittikul

Secretary General

Khom Loy Foundation Mark Cox UPLift Project, Program Manager

Kenan Institute Asia John DaSilva Project Development Manager

Government Savings Bank (GSB)

Yongyuth Tariyo First Senior Executive Vice President of Credit & Operation Support Group

Krungsri Bank Pornvadee Piyakhun VP and Section Manager, Corporate Communications & Public Relations Division

Kasikorn Bank

Umapan Chareonying Manager, Personal Finance Advice and Planning

Bank for Agriculture and Agricultural Cooperatives (BAAC)

Wanchai Charoenchaimongkol

Assistant Vice President, Government Policy Department

Morakot Pitharat Executive Vice President,

Chamnong Siriwongyotha

Team Leader, Office of International Cooperation

Kenan Institute Asia

Nuttanee Sathityatiwat

Consultant, Business and Economic Development Kenan Institute Asia

Securities and Exchange Commission Thailand (SEC)

Sureerut Suradecha Director, Financial Literacy Department

Thailand Securities Institute (TSI)

Krisada Sektrakul Director, Capital market Development Fund

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Provider Interviewee Title

Government Pension Fund

Srikanya Yathip Deputy Secretary General, Member Relations and Communication Group

CFG Services (Srisawad Ngeun Tid-Lor)

Tanyapong Thamavaranukupt

Managing Director

Financial Services Consumer Protection Center, Bank of Thailand

Chanatip Chariyaviroj Director, Financial Services Consumer Protection Center

Hong Kong and Shanghai Banking Corporation (HSBC)

Woranan Sutotpreeda Director, Corporate Communications Department

Thailand Research Fund (TRF) Silaporn Buasai Programme Director, Programme on

Community Research

Standard Chartered

Thepphan Asvatanakul

Director, Credit Cards and Personal Loans Business

Population and Community Development Association (PDA)

Wilas Techo Vice President

Rural Capital Partnets Co., Ltd. (RCP)

Pansa Tajareonsak Managing Director

National Credit Bureau Co. Ltd. Surapol Opassatien Managing Director

Page | 42

APPENDIX 2. ANALYTICAL FRAMEWORK (A)

Simple Finance Class

Financial Literacy for Bank Clients

Financial Literacy for the General Public

Youth Camp Tour The Citi At-risk Women Financial Literacy Program, Phooying-Chalad-Oam, Chalad-Chai

The Citi At-risk Women Financial Literacy Program Phase II

The Citi At-risk Women Financial Literacy Program Phase III

HSBC-JA More Than Money

Standard Chartered Village Bank

Young Investor Program (YIP)

e Private Bank Private Bank Private Bank Private Bank Private Bank Private Bank Private Bank Private Bank Private Bank Private Bank

r Krungsri Bank Kasikorn Bank Kasikorn Bank Kasikorn Bank Citibank Thailand Citibank Thailand Citibank Thailand Hong Kong Shanghai Bank (HSBC)

Standard Chartered

Thai Military Bank

Krungsri Bank Kasikorn Bank Kasikorn Bank Kasikorn Bank Kenan Institute Asia with collaboration from Citbank volunteers, Department of Social Development and Welfare (Ministry of Social Development and Human Security), Bureau of Women Promotion and Protection

Kenan Institute Asia

Kenan Institute Asia through collaboration Citbank volunteers and local / government organizations

HSBC Standard Chartered

Thai Military Bank

To provide personal financial literacy skills, i.e.instill basic financial knowledge and skills in managing loans and saving up responsibly

To provide the audience with reasons why financial planning plays a vital role in our daily lives and futures, and the advantages and disadvantages of investment

To teach students how to record their daily expenses, and to provide basic knowledge on small investment ideas

To provide basic financial knowledge and entrepreneurship skills

To provide personal financial literacy skills, i.e. to instill basic financial knowledge and skills in managing loans and saving

To provide an allocated spending and saving plan for the future

To provide young students with basic financial literacy skills

To provide basic financial literacy and encourage the villagers to set up goals with a proper financial plan

To create potential investors, investment

Page | 43

1. Smart Consumer - how to spend wisely (3 hours) 2. Smart Employee - how to generate more income (3 hours) 3. To be an Entrepreneur - how to manage your business (3 hours) 4. Basic Saving & Investment - how to save up and invest effectively (3 hours) 5. Managing Your Loan - how to avoid debt crisis (3 hours)

Retirement planning, calculating savings bonds, provident fund, investment, tax reduction strategies, converting to savings

Basic financial planning for youth

How to manage income, loans, and saving; how to record your expense before starting to invest

Income Expense Accounting; Surviving Loan Sharks; Savings; Household Accounting

How to increase your income and manage your household account, loan, and savings

Personal finance (earning, spending, saving), effective financial management, importance of ethical business practice

Income – expense accounting, household account management, saving

Business plan, feasibility study, investment

Classroom training conducted by bank volunteers. (180 minute sessions)

Training session (90-120 minutes)

Booklets, CD, internet, iPad application, road shows

1-2 hour session at a local camp held during the summer break in March - May

Classroom training, including role playing games and case study discussions

8 hour training session

In partnership with Silacheep Foundation, Citibank bank volunteers deliver a 9 hours class room training.

6 training session for 30-40 students/ each session lasts 50 minutes, with content provided by JA (Junior Achievement Worldwide) hands-on activity, interactive discussion, board games.

One-on-one training session of 2 days with lectures and games/ Participants are given homework at the end of the first day which is to be handed in on the second day

6-week training period from Monday to Friday (9am-5pm) with lectures and activities (case study)

Page | 44

Students finishing final stage of vocational training. (Age:18-20 years old)

Bank customers, salaried workers, middle income, retired workers, university students

Public Secondary school students, underprivileged children

At-risk women At-risk women in entertainment sector (red light district)

Poor women in Bangkok with low income (lower than 8,500BTH), including women in vocational training center and female prisoners in Bangkok detention center

Primary school students aged 7-11 years old

Selected bank customers from 200 households in the village

Junior and senior university students (3rd and 4th year) from various regions in Thailand

Commercial College Chetupon Bangkok

Bangkok and suburbs, Chiang Mai

Nationwide Buriram, Prachuab Kirikan, Chaiyapoom, Surat thani, Lopburi, Nan, Kanchanaburi, and Chiang Mai

Bangkok Bangkok Bangkok Bangkok Baan Nong Preuk Village, Nakorn Ratchasima province

Nationwide

el CSR Marketing

Expense, Third Party Payment (Employer)

CSR CSR Grant Grant Grant CSR CSR CSR

e 160 Students N/A N/A In the last 15 years 4,090 youth have participated in the camps

81 at-risk women 400 at-risk women

500 poor women 600 students from 14 schools in Bangkok (both public and private school)

20 villagers (this is a pilot project. they are planning to create 3 more village banks within 2012 )

Over 2,500 students

Overall, 95% of participants are satisfied with training based on evaluation conducted after training.

N/A N/A N/A Evaluation conducted with long-term periodic follow-up after 3 months, 6 months, 1 year, 2 years, and 3 years

Pre and Post test, monitoring visits.

Pre- and Post-test along with long-term periodic follow-up after 3 months, 6 months, 1 year, 2 years, and 3 years

HSCB-JA More than Money is regularly contacted by the visited schools to revisit them

N/A N/A

Page | 45

1. Hard to schedule TOT for bank volunteers 2. Need strategy to TOT the teachers at the vocational schools 3. Measuring results

Large diversity among the audience makes it difficult to customize content

Large diversity among the audience so hard to customize content

N/A 1. Since the target group are mainly working class women, they are not willing to join a longer class since it will affect their working hours and their income; 2. Follow up cannot be administered b/c target group could be unreachable

The follow-up process cannot be administered continuously as the target group regularly changes their contact numbers and/or addresses

The follow-up process cannot be administered continuously as the target group usually become unreachable after leaving the vocational training or detention centers

Some schools are not interested or see no importance in the project, since financial literacy is not a compulsory subject.

N/A N/A

Page | 46

APPENDIX 3. ANALYTICAL FRAMEWORK (B)

e Debt Doctor Smart Farmer Household accounting volunteer teacher (

Financial Education in Junior and High Schools

"Smart Money" program on Money Channel

หาเงนิได้ ใช้เงนิเป็น (Ha

Ngern Dai, Chai Ngern Pen = know how to earn money, know how to use money)

"Start-to-Invest" Financial Consumer Protection Center (hotline 1213)

e Government bank Government bank Regulator Regulator Regulator Regulator Regulator Regulator

cy Fiscal Policy Office

(FPO) Bank for Agriculture and Agricultural Cooperatives (BAAC)

Ministry of Agriculture

Thailand Securities Institute (TSI) under the Stock Exchange of Thailand (SET)

Securities and Exchange Commission Thailand (SEC)

Bank of Thailand (BOT)

rs Bank for Agriculture

and Agricultural Cooperatives (BAAC) and Government Savings Bank (GSB)

Rural Clients Development Department

Ministry of Agriculture

Thailand Securities Institute

Thailand Securities Institute SEC personnel SEC personnel Bank of Thailand (BOT)

To improve farmers' understanding of credit process and managing household budgets; train local people to be financial advisors at the village level

Find and create "model leaders" in the farming community

To encourage farmers to do household accounts, and use household accounts to better plan farm production, reduce farming costs, and do household budgets

To increase financial understanding, competence and responsibility

To generate greater access to investment and saving as tool for investment information

To provide common financial literacy principles such as how to manage your loan and saving

To deliver investment advice and investment tips for middle-class customers in an attractive, easy-to-digest format

To provide effective financial consumer protection, encouraging the public to have financial literacy and awareness of financial consumer rights

ics Credit analysis &

household budget management, but expressed interest to promote more saving behavior, household budgeting, and reducing unnecessary spending.

Household accounting/record keeping (understanding household income statement), farm enterprise accounting from the level of the community enterprise

Budgeting, Savings, Debt Management

Life goals, saving, decision making, career, expenditures, consumption, purchasing power, consumer finance, risk & insurance, budgeting, banking, investment, home economics, entrepreneurship, retirement planning

Investment tips, investment instruments e.g. gold, mutual fund, stock, deposit, insurance, and entrepreneurship

Saving, debt management

Investment, saving Consumer rights, responsibilities, debt management, bank services

Page | 47

Training of Trainers (ToT), consultancy services at the community level by Debt Doctors who are also directors of local village funds or saving groups

84 learning centers (Process Facilitators at the different branches are responsible for training); play video at centers, BAAC staff run radio shows and highlight successful farmers, newspapers, plan to have TV program

Training of Trainers (ToT)

Classroom training by teachers / trainers utilize instructor manual, publications for youth, e-portals, financial quiz show, game/competition, camps and model schools

TV channel and website www.moneychannel.co.th

Mass Media: Television program and magazine article

Investor Education via mobile application (website also lists media links e.g. YouTube of recorded TV show 'Chris Delivery' and radio shows on FM 93 and 96.5. and celebrity tips)

Launch 2-3 campaigns each year

ce Farmers Farmers Farmers Primary and secondary

school students (Grade 1-3, 4-6 and 7-12.

Middle income General audience Potential stock exchange investors such as salaried workers and university students

Mass, but will segment to the following: office workers, own business (micro-entrepreneurs), and students

hy Nationwide Nationwide Nationwide Nationwide Nationwide Nationwide Nationwide

(smartphone users and TV consumers)

Bangkok and regional offices in Chiang Mai, Khon Kaen, and Songkhla

l Government program

Government program Policy budget CSR Budget Advertisements CSR Budget CSR budget Policy budget

As of 31 July 2012, GSB has trained over 121,000 debt doctors. The target is to train 180,000 debt doctors by the end of 2012.

6 million borrowers from farming household

36,000 farmers 7,000,000 students N/A N/A Nationwide, the "Start-to-Invest" application has been downloaded over 45,000 times as of 31 August 2012

Page | 48

N/A Unknown N/A Teachers request more materials

N/A Unavailable. Publication numbers of magazine and newspaper are counted along with numbers of rating scale reported back from the TV station.

N/A N/A

Implementers encounter challenges in changing savings, accounting and budgeting discipline of the people. ToT model makes it difficult to tailor to specific needs of different people.

1. Ambitious, unclear communication strategy. 2. Focus has been on SMART farmer campaign, but not on building specific competencies. Need separate topics and develop strategy and materials for each topic. 3. Lacking internal capacity to develop materials 4. Want more female, hill tribe / migrant workers, urban poor, those under poverty line

N/A Unknown results of program; Trying to get the Ministry of Education to insert the program as part of life skills curriculum for high school students

N/A High cost of television airtime

N/A N/A

Page | 49

APPENDIX 4. ANALYTICAL FRAMEWORK (C)

e Smart Up, More Freedom Happy Money Project for Factory Workers

UpLift Project (Income Generation Program)

Financial Fitness Combat Poverty using Area-Based Research (ABC)

Program to develop accounting, financial, and procurement skills for micro-enterprises

Debt counseling program

e Semi-Gov. agency Civil Society Civil Society Civil Society Civil Society Civil Society Civil Society

cy Government Pension Fund Thai Health Foundation MasterCard Foundation/UNIFEM MasterCard

Foundation/Swiss Agency for Development and Cooperation (SDC)

Thailand Research Fund Rural Capital Partners, Co. Ltd. (RCP)

Credit Card and Personal Loan Debtors' Club

rs Government Pension Fund Thailand Securities

Institute (TSI) designed teaching materials; taught to volunteer teachers and practitioners from different factories

Khom Loy Foundation Right to Play Province head (researcher) and project coordinator have co-responsibility. The coordinators are mostly NGOs: they report to TRF. Province heads are mostly local professors, sometimes governors.

RCP personnel Club personnel (all volunteers)

To provide financial literacy and awareness among the audience, inspiring them to adjust/fix their financial habits in order to achieve financial stability

To provide financial literacy for workers

To improve the lives of women living on a landfill community

To teach students financial literacy and life skills through play and sport

To better integrate anti-poverty programs in the local community via the use of household account book and community plan as anti-poverty tools

To create micro-enterprise management capability within each community

To help heavily indebted borrowers toward successful debt resolution

ics Financial planning, savings,

debt and debt management, investment and investment risk, planning for retirement

Income Expense Accounting, Smart Consumer Tips, Savings and Loans Management, Surviving Loan Sharks

Money Beliefs, Savings Goals, Budgeting Plans, Time Management & Market Session

Budgeting, savings Just incentivize people to record their income and expenses in the right categories, in provided household account books

General accounting, household accounting, money management

Debt management, what to do when you are sued, what you can expect from the court, how to calculate interest payments, financial management tips

Page | 50

m 1-2 hour training session in

75 provinces. Each trainer has to be able to train 35 people per year, and they get paid 2,000 Baht.

1 Thailand Securities Institute personnel will train 2-3 trainers at factories. Factory trainers then train workers.

On site training. NGO staff train groups of women

Training Training Training Counseling

ce Government officials Low income factory

workers Burmese Migrant workers who work in occupations related to landfill and recycling

Students Villagers Rural population Heavily indebted borrowers of credit card and personal loans

Nationwide Bangkok, Chiang Mai, Prachinburi, Samut Prakarn, Songkhla

Chang Rai, Mae Sot N/A Uttraradit, Pitsanulok, Kampaengpetch, Ubon Ratchathani, Yasothorn, Kalasin, Nakon Panom, Nakon Ratchasima, Chaiyapoom, Nakon Pathom, Chainat, Uthai Thani, Pattalung, Songkhla, Surat Thani, Nakon Si Thammarat, Satul

4 provinces affected by '04 Tsunami including: Ranong, Pangna, Krabi, and also Pattalung, and Pattani, Yala, Narathiwat

Bangkok

Policy budget Grants Grants Grants Research budget Grant Volunteer basis. Individual club trainers receive payments from companies in the capacity of lecturers. Foundation for Consumers helps refer 'clients' to the club.

53,998 government officials 60 factories/ 5,000 participants;

60 people 27,495 Over 110,000 households in 21 provinces have been given household accounting books, over 41,000 households use it regularly.

N/A After 9 years of operation, currently the club has over 70,000 members.

Page | 51

80 percent out of 9,082 participants who took the survey are satisfied with the training, and some of the participants think it would be better if the program focuses more on saving instead of investing.

Participants from our model factories are able to reduce their spending by 31% and increase their saving by 42%

The sessions participants say are most valuable are Savings Plan, Money Beliefs and Goals

N/A About 10% of households reported better household finances after using household account books. Over 41,000 households use it regularly.

Most villagers ask RCP to visit them more often in order to guide them along the whole process

Over a thousand members have thanked the club for helping them resolve debt successfully. A few companies have invited club trainers for second visit.

ges Participants have different

financial habit and interest, making it difficult to adjust the content according to each group

The ability of each organization to continue the training

Fundraising, especially for the migrant workers; hard to justify funding proposal; was thinking of a link to microfinance, or grant; setting clear action to measure; being outsiders so better to recruit from the community

N/A Difficult to manage the team on an ongoing basis.

No budget for the follow-up process / lacks capable personal who can offer what villagers really need

Not enough time / no paid personnel. All the trainers used to be borrowers who successfully paid off their debts; they work for the club on volunteer basis

Financial Literacy Findings and Recommendations ReportThe findings in this report were used to...

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