THE EFFICIENCY OF MANAGEMENT OF SAVINGS C0OPERATIVES IN THAILAND

Abstract

           Savings cooperatives are a type of financial institution established as a cooperative in accordance with the Cooperative Act, B.E. 2542 (1999). The objectives are to encourage members to save money and to provide financial assistance to members. There are different numbers of members and operating funds. The cooperative’s interest rate is determined by the operating committee, which differs from commercial banks with the Ministry of Finance and the Bank of Thailand. The fact that the Savings Cooperatives is not a member of the National Credit Bureau results in a shortage of an assessment of the members’ debt repayment ability from the savings cooperatives’ loan approval process. The analysis is mainly based on the internal financial situation and the returns that savings cooperatives receive. Therefore, the change in interest rates of savings cooperatives was delayed in keeping with the events, leading to a risk to savings cooperatives.
           The purposes of this qualitative research on the financial performance of savings cooperatives in Thailand are 1) to study the internal and external environment associated with the operations of savings cooperatives in Thailand and 2) to analyse the efficiency of financial management of savings cooperatives in Thailand according to the principles of CAMEL analysis as well as the population and sample used in the research consisting of academics and administrators with knowledge and experience in managing savings cooperatives, savings cooperative experts in the Cooperative Promotion Department, the Cooperative Auditing Department, and the Cooperative League of Thailand by interviewing 17 people. The quantitative research used secondary data derived from statements of financial position and income statements in financial reports of 302 savings cooperatives in Thailand during 2018-2022 in order to analyse the efficiency of financial management.
           Findings:
           Under the internal environment, it was found that the organisational structure is clear and appropriate for operations. An operating committee and a management department work along the rules and regulations of the savings cooperatives. Members elect representatives from the general meeting to manage the cooperatives. According to the cooperative’s principles, there are a total of 7-15 people, with the committee managing the work on behalf of the members. In addition, politics, economic conditions, socio-culture, technology, environment, and law are key elements of the external environment. In cooperative laws and other related laws, there are incredible opportunities to have more investment options. There are government agencies that oversee and organise training for personnel who lack knowledge and specialised abilities in matters of finance and accounting. In terms of obstacles, higher inflation and increased interest rates with respect to the policies affect the ability to repay debts, which causes non-performing debts of savings cooperatives to increase. The trend of the profit growth rate of savings cooperatives in Thailand is lower than the average ratio (6.20).