The second million

In 2001 the Thai state set out to give every village a million baht. Not every poor village or every well-run village: every village, and every urban community, to lend to its own members and lend again as the loans came back.

Twenty-five years later there are 79,610 of these funds, with more than 12 million members, by the fund office’s count. The first million was meant for everyone. Every top-up since has asked the fund to qualify first.

What the fund is

A village fund is a pot of money run by an elected committee of villagers. Members borrow from it, repay with interest, and the interest stays in the fund. The National Village and Urban Community Fund Office in Bangkok sets rules and grades the funds; the money is managed in the village.

It became one of the country’s main lenders. In the National Statistical Office’s 2013 survey, as the parliamentary study reports it:

• 66.7% of indebted households had a bank as their main lender, of which the state agricultural bank alone was 30.8%;
• 23.6% had the village fund, up from 19.2% in 2009;
• 5.2% had an informal lender.

By January 2015 the state had transferred ฿151,565.82 million into the funds, against ฿166,895.80 million approved, and the parliamentary study counted 79,255 funds: 74,989 village funds, 3,528 urban community funds and 738 military community funds.

The first million and the later ones

The first round, from 2001, was designed to reach every fund: a million baht per village or community, on a budget the Cabinet later widened from ฿80,000 million to ฿81,500 million.

The later rounds were not.

The second round, 2010–12, added ฿19,559.2 million, borrowed under the 2009 economic-recovery decree. By the parliamentary study’s account:

• 70,011 funds received it (88.34%);
• 356 did not apply;
• 8,808 applied and did not qualify — “mostly funds that could not register, because they had large arrears or could not close their accounts.”

The third round, 2012–13, was another million per fund — the “second million”, เงินล้านที่ 2. By September 2013 it had reached 53,590 of 79,255 funds (67.6%), the ones “ready and passing the criteria.” 25,665 had not received it. The gap was not even:

Urban community funds fared worst: 842 of 3,528, or 23.9%. (Shares other than the regions’ are this site’s arithmetic from the same table.) The study does not say why the South and the cities lagged, and this site does not guess.

Thirteen years later

In July 2026 the minister who chairs the fund board said ฿3.4 billion of that third round was still undelivered — a million baht each for funds that had “fallen through” since 2012, enough for about 3,400 funds (this site’s arithmetic). The reason given: those funds had problems, “such as having no committee, or being in legal disputes”, and had been graded red.

The plan announced was to send the fund office’s 14 branches to help red funds become yellow, so that they would meet the criteria; the first 100 ready funds were to be paid in July and the rest within 2026.

So the gap has narrowed — from 25,665 funds in 2013 to about 3,400 in 2026 — and the rule has not changed. The money waits until the fund qualifies.

The 2026 round

On 10 August 2026 the government launched a new top-up, “Thais helping Thais: added capital, half the interest”, with ฿4,452 million for the funds, according to the fund office’s own release. The idea is that a fund halves the interest it charges members on loans from its first account — the one that holds the state’s money — for one contract round, and the state tops up its capital in return.

Who qualifies, in the fund office’s words: a fund registered as a juristic person, with a committee as the rules require, that has submitted its financial statements continuously for at least two years, and whose members have voted to join. A fund that takes the money and does not cut the interest can be made to pay it back.

How much, as the fund board chair described it: a tiered amount by the interest given up, from ฿30,000 for up to ฿30,000 of interest cut, to ฿150,000 for more than ฿120,000. The first round approved 570 funds in 16 provinces, ฿38.53 million, reaching 45,628 members and ฿32.2 million of interest.

The design is sensible. It is also, again, a round for the ready. A fund without a committee, or without two years of accounts, or not registered, cannot apply, and a fund with a larger loan book earns a larger top-up.

The bank’s terms

Funds can also borrow from the state banks. The Government Savings Bank’s current rules, published in the Royal Gazette in April 2025:

• the fund must be registered as a juristic person and certified by the district subcommittee;
• up to ฿3 million, of which an overdraft of up to ฿1.5 million;
• term loans up to five years;
• security either deposits or property, or a guarantee signed by every member of the fund’s committee.

The committee members are villagers. On those terms, the people who volunteer to run the fund can be the ones personally on the hook for its bank debt. (Article 176 Taking turns found the same structure among teachers who guarantee each other.)

Repayment

The fund office’s own figures, in the parliamentary study, show the repayment rate falling, against loans in arrears:

• 95.26% repaid in 2004;
• 92.85% in 2005;
• 88.26% in 2006;
• 77.30% in 2010.

The study warned that different evaluators used different samples, and that the trend is clearer than any single number. It also found the gains: new borrowers who had never had a loan, some members using fund loans to pay off informal lenders, and agricultural income that rose — though not enough, it said, to raise household income overall.

What this adds up to

The village fund began as a universal programme: the same million for every village and community.

Every round since has asked the fund to qualify first — registered, accounts closed, committee in place, two years of statements. The funds that fail those tests are the ones with arrears, missing accounts, no committee or lawsuits. A fund can be in that state because it was badly run, or because its members could not repay. The rule does not distinguish, and either way it is the members who wait.

This is the second structural finding at village scale: a protection you must qualify for will be missing for whoever most needs it. It is also a record of how a universal programme became a categorical one: the first million was meant for everyone; the top-ups that followed were not.

None of this says the criteria are wrong. Money sent to a fund with no committee may simply disappear, and the fund board has said it is pursuing embezzlement and misuse. The point is that the criteria have a cost, and it falls on the members of the funds that cannot meet them — for some, for fourteen years.

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Common misconceptions

“Every village got two million baht.” The first million was meant for every village. The second, from 2012, reached 67.6% of funds by September 2013, and in July 2026 about ฿3.4 billion of it was still undelivered.

“The village fund is a handout.” It is a revolving fund. Members borrow and repay with interest, and the interest stays in the fund.

“Any fund can join the 2026 half-interest scheme.” Only funds registered as juristic persons, with a committee, and with at least two years of financial statements submitted.

“Village funds are a small part of rural credit.” In 2013, 23.6% of indebted households named the village fund as their main lender.