en Thrift and Credit CooperativesSc

en Thrift and Credit CooperativesScreen Shot 2557-08-19 at 12.09.31 AM
Thrift and Credit Cooperatives are those whose members are people having the same occupation or living in the same community. Its main purpose is to promote savings among members and provide loans for productive investment.

Backgound

The continuously increasing living cost has become a big burden for those in the low in income group as they never earn enough to cover their daily needs. They tend to deal with this problem through the moneylenders who charge them very high interest rates. By doing so, their debt situation worsens and becomes increasingly serious.

However, this money problem lessened when they join together under the cooperative principles of self-help and mutual help. The first cooperative in this regard was formed among officials of the Cooperative Promotion Department and employees of the Bank for Agriculture and Agricultural Cooperatives (BAAC).
It was registered on 28 September 1949 as the Cooperative Officials' Cooperative Limited, which is presently named the Cooperative of Cooperative Officials, Ltd. On the other hand, the Soon Klang Thewa Credit Union Cooperative was established as the first community savings cooperative in the slum area of Huai Kwang and Din Daeng districts, Bangkok on 25 July 1965.

Objective

Being as financial institution, the specific objectives of Thrift and Credit Cooperatives are

1. Encourage thrift among members. To encourage saving habit, the cooperative currently offers two types of savings:-

1.1) Shares: All members are required to pay monthly shares at rates agreed upon by both the members and their cooperatives. The shares may be deducted directly from monthly salaries. Dividends can be paid to members at specified rates without tax deductions. When resigning form a cooperative, the member can withdraw his/her shares.

1.2) Deposits: Both current and fixed deposits are generally offered to cooperative members. The deposit Interest rate may be equal to, or higher than commercial bank rates depending on the financial status of each cooperative.

2. Provide loan services to members. Members' shares and deposits comprise significant part the loan funds made available to members with interest charged usually at rates lower than that of the prevailing market rates. The three general types of loans provided by this cooperative type are:

2.1) Emergency loans: In crisis or emergency cases, a member may borrow up to half of his/her monthly income, depending on the cooperative financial status, without collateral. Repayment is normally made in two installments.

2.2) Ordinary loans: The cooperative can provide an ordinary loan, again, depending on its financial status. This can be between 4 to 15 times, of member monthly incomes or within the range of 40,000 to 300,000 baht with one other member acting as guarantor. Normal repayment in this regard ranges from 24 to 72 installments. The maximum amounts allowed for emergency and ordinary loans are based on members' incomes.

2.3) Special loans: When the cooperative extends its services to housing and investment purposes, a member may borrow the actual amount required for constructing or purchasing houses, land and other real estate. generally, not exceeding the ceiling amount of between 400,000 to 1,000,000 bath. The repayment period is between 10 to 15 years, using real property as collateral.