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Abstract: This paper evaluates the impact of the Thailand Village and Urban Revolving Fund on household expenditure, income, and assets. The revolving fund was launched in 2001 when the Government of Thailand promised to provide a million baht (about USD 22,500) to every village and urban community in Thailand as working capital for locally-run rotating credit associations. The money - about USD 2 billion in total - was quickly disbursed to locally-run committees in almost all of Thailand's 74,000 villages and more than 4,500 urban (including military) communities. By May 2005, the committees had lent a total of about USD 8 billion, with an average loan of USD 466. Using data from the Thailand Socioeconomic Surveys of 2002 and 2004, each of which surveys almost 35,000 households, the authors find that the borrowers were disproportionately poor and agricultural. A propensity score matching model finds that Fund borrowing in 2004 was associated with, on average, 1.9 percent more income, 3.3 percent more expenditure, and about 5 percent more ownership of durable goods. These results are broadly consistent with the results from instrumental variables models (where the identifying instrument was the inverse of village size), which however show a smaller (marginal) effect. Households that borrowed both from the revolving fund and from the Bank of Agriculture and Agricultural Cooperatives gained substantially more in terms of higher income than those who borrowed from either one or the other or from neither.

Agricultural cooperatives --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Communities & Human Settlements --- Credit associations --- Debt Markets --- Durable --- Durable goods --- Economic Theory and Research --- Emerging Markets --- Exchange rate --- Expenditure --- Finance and Financial Sector Development --- Financial institutions --- Household incomes --- Housing and Human Habitats --- Instrument --- Interest rates --- International bank --- Investment and Investment Climate --- Labor Policies --- Loan --- Loan amounts --- Macroeconomics and Economic Growth --- Microcredit --- Microfinance --- Poverty Monitoring and Analysis --- Poverty Reduction --- Private Sector Development --- Repayment --- Repayment of principal --- Revolving fund --- Rotating credit --- Rural Development --- Rural Poverty Reduction --- Social Protections and Labor --- Working capital