Addressing the Unbanked

The term underbanked or unbanked describes households or individuals without a checking or savings account. It also includes those who have a bank account but otherwise lack adequate access to other traditional financial services, credit, or loans. These individuals face a higher risk of becoming involved with informal financial bodies, which could threaten their livelihood and financial stability. Addressing the issue of those who remain unbanked, therefore, is crucial.

SITUATION OF FINANCIAL DISPARITIES

According to Tech Wire Asia, a tech journalism site, in Thailand, up to 63% of adult citizens are either unbanked or underbanked. This demographic includes lower-income consumers and micro or SME businesses operating outside the banking system. They often seek riskier alternatives of financing services outside of their bank due to inconvenience or fear that their request will be denied, putting them at a higher risk of using expensive and risky credit products. To alleviate these issues, banks and other financial institutions must play their part in ensuring financial equality for all. By establishing new policies or reviewing old ones, they have the ability and authority to set precedence and allow those who remain unbanked to register. However, despite these challenges, Thailand has made exponential progress in decreasing the financial disparity gaps. More institutions and businesses have begun to see the opportunity that lies within investing in financial equality and are playing a larger role in the solutions.

GREAT EXAMPLES FROM THE GOVERNMENT SAVINGS BANK (GSB)

The Government Savings Bank (GSB) of Thailand is a social bank that aims to reduce inequality and foster fairness in society. Its efforts serve as a GREAT example, as its vision is to become a leader in savings promotion through digital technology for sustainable national development and create a happy and secure future for the people. GSB operates in dual missions: “Commercial Mission for Social Mission.” To achieve this, the bank uses profits from its commercial operations to support the social functions of its business, focusing on People by striving for financial equality and Profit by emphasizing their organization's strength for impact, which covers the Sustainable Development Goals (SDGs). From 2020 to 2022, GSB contributed over 47.5 billion THB to “Making a POSITIVE Impact on Society,” which benefitted 16 million people across more than 50 projects, such as GSB’s Vehicle Registration Loan, which offers interest rates below the market rate. The market interest rate is roughly 24-28%, whereas GSB asks for only 10%. Aside from this, the bank also supports entrepreneurs who adhere to sustainability with loans that have interest rates based on how well they perform to address this issue.

The example that GSB sets should act as a call to action for other organizations, both local and international, to contribute to solving social issues while simultaneously integrating the Triple Bottom Line (Profit, People, and Planet). Financial institutions have the power to solve many economic, societal, and environmental issues, and this Thai bank is a GREAT example of how creating a positive impact on society can also positively impact the organization’s bottom line. The bank's provision exceeded 100 billion Baht from 70 billion Baht in 2019.

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