The Role of Microcredit in Poverty Reduction: Empirical Evidence from Thailand’s People Bank Loan Program

The purpose of this study is to: (1) examine the role of microcredit in reducing poverty among all households and its impact on net profit among households engaged in non-agricultural entrepreneurship, and (2) survey experiences and challenges associated with participation in Thailand’s People Bank project. Using nationally representative socio-economic household survey data from 2019 and 2021, covering approximately 50,000 households, the study finds that in 2019, households with at least one member participating in the People Bank project were less likely to be classified as poor. However, this estimated effect is not statistically significant when using the 2021 data. Additionally, households with at least one member borrowing from the People Bank project report significantly higher net profits compared to non-participating households. A survey of 400 residents in Chiang Rai reveals that about two-thirds of program participants report the highest level of satisfaction with the initiative. However, approximately 75 percent of non-participants had never heard of the program. Among respondents, the availability of products and services offered by the program was identified as the most important factor influencing participation.