BANGKOK, Sept 8 – The Yingluck government’s programme to offer credit cards for farmers will be launched by Nov 1, fulfilling one of the major campaign promises that the Pheu Thai Party pledged to the grassroots that helped it win the July election.
Luck Wajananawat, manager of the Bank for Agriculture and Agricultural Co-operatives (BAAC), on Thursday spoke of the progress being made toward the launch.
The committee set up by the BAAC agreed to contract a credit card system, including equipment, managed by a service provider for three years, with a budget of Bt1 billion. Rental fees have been set at Bt648 billion including issuing 3 million credit cards with a Bt360-million budget.
A ‘smart card’ system will be used for security authentification.
Techniques, processes for checking transparency, and fiscal control are the main criteria for the appropriate service provider to be selected. Competitors must have scores of at least 80 in order to pass to the next round for their prices to be considered.
This project’s management system will include registration, credit cards issuance, partners of contract, credit limits, and debt payment.
According to Mr Luck, the BAAC credit cards in their initial phase will be limited to payment for agricultural production costs from varied cooperatives and over 3,000 stores affiliated with the BAAC nationwide, with the number reaching 5,000 shops in the following years.
The cards will offer a maximum 70 per cent loan limit in accordance with the value of each farmer-debtor’s product for sale, while carrying a 7 per cent interest rate, or zero per cent–in case a subsidy is provided by the government.
Other benefits include annual fee exemption, a 30-day interest-free period, free life insurance of no more than Bt100,000, emergency cash loans of Bt10,000, and special interest rates for cash deposits.
Promotions from networked stores cover discounts, point-of-sale collections for gifts or other rewards.
In the second phase, farmers will be able to withdraw cash, make payments along with other services as offered by other service providers.
The BAAC manager said some Bt20 billion is expected in the credit system in the first year, whereas Bt44.6 billion is forecast in the second year, and about Bt70 billion in the third year, respectively.