Village funds fear they won't be ready for legal leap

Extension to Dec deadline sought

An extension to the deadline for the registration of village funds as full juristic entities has been proposed to give them more time to bring their organisations up to par with requirements. The Office of the Attorney-General's (OAG) working group, made up of staff from academic and legal aid sections, yesterday discussed measures to help committee members of village funds who had sought their advice on the issue.

Several village fund committees have expressed concern that they may not finish streamlining their organisations in time for the registration deadline set for Dec 30, as stipulated by the 2004 Village Funds and Urban Communities Law.

To be eligible for registration, the funds must be qualified in terms of accounting, transparency and staff performance.

The registration of the funds as full juristic entities under law is expected to expand their operational scope, including giving them the ability to borrow from other entities.

Damri Chalermwong, of the OAG's legal aid section, said most village funds have been plagued with loan defaults and need more time to clear the problems and to make changes to their management systems before transforming into juristic entities.

The OAG's working group has decided to forward the deadline extension proposal to the Prime Minister's Office, which oversees the Office of the Village Fund and Urban Community Commission.

It will then be submitted to the National Legislative Assembly to consider amending the village funds law to allow for the extension to the current deadline.

Kowit Sripairoj, acting provincial prosecutor of Mae Hong Son, said village funds were having trouble seeking debt repayments and were plagued with borrowers defaulting on their loan repayments.

Some village fund committees, which were not clear about the funds' status, filed lawsuits in the name of the funds to sue borrowers to try and force them to make repayments.

But the court turned down their cases, with the funds named as plaintiffs, because the Council of State previously ruled that the status of village funds was only one of a public organisation.

They were neither state agencies nor state officials, thus were unable to file such lawsuits, the court ruled.

Therefore, members of the funds had to act as individuals in filing court cases and had to use their own money to stump up for legal fees, which is too great a burden for them, Mr Kowit said.

In 2001, the Thaksin government approved 81.5 billion baht for the village fund programme, with 78.83 billion baht disbursed to villages at one million baht each, and the rest as interest.

Of the total budget, about 50 billion baht was withdrawn from the Bank for Agriculture and Agricultural Cooperatives and about 30 billion from the Government Savings Bank.

The law states that borrowers must have equity in the fund, and only use funds for approved purposes. Loan approvals are made by each fund committee, with a limit of 20,000 baht in most cases and as high as 50,000 baht if approved by all of a fund's directors.

Bangkok Post
Sunday February 11, 2007