There are five steps that must be taken in order for a Village Fund to become operational:
The village first sets up a local committee to run the fund and to determine the lending criteria (interest rate, loan duration, maximum loan size, and objectives).
The committee then opens an account at the BAAC (which has about 700 branches) or another "facilitator", and the government deposits a million baht into the account.
The local Fund committee sifts through loan applications and determines who may borrow and under what conditions (interest rate, duration, etc.).
The borrowers go to the BAAC (or other facilitator) to get access to the loans.
The borrower repays the loan with interest.