April 6, 2009
A group of women from the Mae Taeng district in Chiang Mai disbursed their first dividend today - a 46% return on members' savings. Last April, the group joined together to form their own savings and credit program. Rather than paying the local lending company 5% per month in interest, the women chose to start lending to themselves at 2% per month. Not only did it provide cheaper loans but an annual dividend meant that the village would profit from the loans.

Village Banking is commonly used by NGOs and MFIs who are involved in microfinance activities in Thailand. It has been proven to work in nearly every region of the country where rural populations reside. SED, an affiliate of the Catholic Relief Services, runs a highly successful program in Surin province with over 8000 clients. Other organizations, such as Common Interest and and PDA have similar programs that are attracting international attention.

Locally, money lenders are called "Helmet Men" for the simple reason that they usually ride motorcycles and wear very large (and dark) helmets. Helmet Men work in most areas and continue to drain a community of resources. With Village Banking, the hope is that this stops and that local communities can profit from their own efforts.