Poverty reduction through redistribution of income among the populace is a major concern of most governments which employ varying methods to achieve its objective. Among the methods used by the present Thai government is that of funding loan schemes to make money available to help the financially weak in rural and low income urban communities. The declared aim is to provide subsidised credits to help essential rural micro-business projects or to ease vital personal consumption. This thesis describes the National Village and Urban Community Fund lender set up in September 2001 in the Pradit-Torakarn community in the Jatujak district of Bangkok and compares it in detail with an earlier savings-and-loan scheme - the Pradit-Torakarn Community Savings Group started by community members with minimal official assistance. The Savings Group succeeded in mobilising savings through high dividends paid to its members made possible by realistic loan pricing and prudent fund management. On the other hand, operational rules including concessionary interest rate of the Village Fund favoured the financially better off and well-connected members.
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