Thailand
Population  
60 Million

Urban Population
 31%

* UCDO has its own development process and separate Board of Directors

Savings activity becomes a tool, not an end in itself

Savings and credit as a means of engendering a community's own holistic development.

Linking the savings groups into Networks

Multiple Network for different purposes

Thailand has over 2,000 slum communities in which approximately two million people, regarded as the urban poor, are living. 

In fact, the true number of urban poor is much larger than that, since many who live scattered outside the slum communities are not counted, but slum-dwellers and squatters comprise the largest groups. 70% of Thailand’s urban poor earn their living through the informal sector - the majority as daily wage earners and small traders. The major problems are land and housing insecurity, poverty, rights in the city, access to basic infrastructure, health and education.

2.2       Urban Community Development Office

UCDO was set up in 1992 as an attempt of the Thai Government to take a new approach and develop a new process to address urban poverty. 

The Government granted a revolving fund of 1,250 million Baht (about US$ 32 million) through the National Housing Authority*  to set up a special program and new autonomous unit known as the Urban Community Development Office to address urban poverty at national scale. 
The program sought to improve living conditions and increase the organizational capacity of urban poor communities through the promotion of community savings and credit groups and the provision of integrated loans at favorable interest rates as wholesale loans to community organizations. 
This new Urban Poor Development Fund was to be accessible to all urban poor groups who organized themselves to apply for loans for their development projects.

For the urban poor, organizing themselves into savings and credit group is a simple, direct and uncomplicated way of taking care of their immediate day-to-day needs. Savings activities become a tool which links poor people within a community to find ways of working together, from handling simple basic credit needs to managing more complex development activities which link them with the formal system. Savings and credit groups become a significant entry point for a community’s own development process, to come together as a community, and to link with external resources. And the Urban Poor Development Fund is the resource with which community people develop themselves.

The idea, however, is not simply to provide low-interest loans to the poor. Community savings and credit activities are seen as a means for engendering a community’s own holistic development, which should gradually be able to deal with the root causes of poverty. Much more important than cheap loans is the development of community managerial capacity and stronger community organizations which are able to lead various community development processes. It is therefore important that development process include community action planning and the creation of partnerships with other local development actors - especially the municipalities - and to link up with various other local development activities. The process of continuous learning and development within and between poor communities must be the focal development mechanism to address problems of urban poverty, mainly by the urban poor themselves, using the Urban Poor Development Fund as their basic resource.

2.3 Community Networking as a joint development mechanism

One of the most significant aspects of UCDO’s work has been the process of linking together the urban poor savings and credit groups in the same city and district, or with similar development issues and common interests to form many different community networks. Networks have also been organized at various levels - from national, regional, within-city, zonal and district-wise. In fact, no particular format about community network have been proscribed, but the networks have developed according to the interest of the groups involved, in accordance to their own changing context.