Rural credit in the survival of small enterprises: evidence from Northeastern Thailand

Abstract

Local investment is closely related to the local economy. More than half comes from a variety of sources. In this research we tried to find a suitable model for the survival of small enterprises in remote areas where it is difficult to find any finance or banks. Data was collected in ten villages in Khon Kaen and Roi Et provinces in northeastern Thailand in January and February 2006. Our findings show that credit relates to the creation of enterprises. The local agency, saving group and entrepreneur group have important roles in credit provision at the occurrence stage. Later they push production and enterprises increase. This effect drives the development of the region. The rural economy is the next step in this push and pull process. Then regional development occurs and pushes back to stimulate the savings group and the entrepreneur group to be stronger.