The Savings and Credit Cooperative of Royal Police Cadet Academy Limited : New Guidelines for Good Governance Reform in the Royal Thai Police

The fluctuations in the Thai economy since 1997 have had a big impact on the standard cost of living of the police officers. Many struggle to earn enough income to cover the expenses. Debt problems have put officers under a lot of stress affecting their standards of performance and encouraging corruption. The Savings and Credit Cooperative of Royal Police Cadet Academy Limited (RPCA Coop Ltd) has played a crucial role in improving a quality of life of the members by alleviating their financial problems. An evaluation of RPCA Coop Ltd operation revealed that it has achieved an objective to alleviate the members’ debt problems. RPCA Coop Ltd has helped the members to decrease their physiological needs and their standard cost of living and to become economically sufficient. When their physiological needs are met, they will desire to be well respected and to have job security through high performance efficiency in the police force.

The fluctuations in the Thai economy since 1997 have resulted in a high cost of living.Most people find it is progressively harder to earn enough to live on.According to the Confederation of Thai's Labour (SERC), the review cost of living survey that compares more than 400 individual prices across 160 products and services, brushed up average monthly disposable salary was more than 14,016.10Baht net after taxes since 2016 while the minimum wage was currently set at 300 Baht or 9,000 baht per month (Bangkok post, 2015).Therefore, Thai households are among the region's biggest borrowers, but also low wages that make the poor ready bait for illegal loan sharks.Thai police, especially low-ranking officers, are no exception.Most of the officers, especially those with partners with low income or being economically inactive, are constantly struggling with household debts.Some have managed to find a second job or extra cash each month as their salary can only cover three quarters of the monthly expenses.Many decide to get a loan, either from a financial institution or a loan shark, to make up for a shortfall to meet minimum standard of living.More than 70% the loans are informal loans from loan sharks.Debt problems have put many officers under a lot of stress (The Royal Thai Police's Research Office, 2011) affecting their standards of performance and encouraging corruption.As a result, the Savings and Credit Cooperative of the Royal Police Cadet Academy Limited (RPCA Coop Ltd) launched its Informal Loan Debt Management Project hoping to ease the police officers' debt problems.The project offers a special loan for the members to deal with informal loan debt repayment both for short-term and long-term arrangements as well as providing other benefits for the members in debt management and improving the quality of life of the members and their families.This is expected to improve police officers' psychological wellbeing resulting in better performance at work and to decrease corruption in the police force bringing a positive impact to the society and the country as a whole.

Literature Review
Thailand's Tom Yum Goong economic crisis in 1997 started when the Thai government was forced to float Thai baht using the floating exchange rate on the 2 nd July 1997 due to lack of foreign currency.The Ministry of Finance then had to accept a loan from the International Monetary Fund (IMF) on the 5 th of August 1997 (Kulpatra Sirodom, 2009).The US economic recession in 2007 or a so-called Hamburger Crisis further affected Thailand's economy shaking up the country's economic structure and every household.A decrease in government revenue resulted in the government's hostility.In 2008, the Royal Thai Police received a budget of 36,959.40 million baht (Note 1) decreasing from a budget of 39,045.83 million baht in 1977(The Royal Thai Police' Budget Office, 2008).
A survey from the Royal Thai Police's Research Office in 2009 stated that most police officers, including low-ranking constables, lieutenants, and majors, did not earn enough to live on as a cost of living increased.Those with partners who did not work or who had low income tended to be heavily in debt.Many managed to find a second job or earned extra income to cover a shortfall in income which constituted a quarter of their monthly expenses.19.7% of the officers had a second career or were self-employed.77.4% took either formal or informal loans.17.4% took loans from a financial institution.34.2 % took informal loans from their family or relatives.24.2 % had to pawn their possessions.11.1 % had to sell their possessions.A portion of monthly salary went toward repaying the loans.70% of the police officers' loans were informal loans.
The survey revealed that police constables had an average monthly loan repayment of 1,577.87baht while sergeants had an average monthly loan repayment of 4,269.81baht.Major-ranking officers had an average monthly loan repayment of 5,977.81baht.It was also found that most of the police officers were not a home owner.46% lived in a police staff housing estate.Only 18.1% owned a house or had a partner who owned a house.This created a big concern of a housing problem when the officers were to be retired.Thai police officers' monthly outgoings also included additional social expenses believed to help improve their career prospects constituting 3,009 per month for superintendent ranking officers and 5,770 per month for superintendent inspectors.It was reported that low-ranking officers whose starting salary was at 4,700 baht for a constable had to set aside a certain amount of social expenses (Note 2) as well.Officers in special police divisions such as patrol officers or traffic officers received an extra position allowance of 1,200 baht per month.The pay scales mentioned above were gross salary.Therefore, tax and pension contribution were considered as additional expenses.Whilst a police inspector in a lieutenant rank had a starting salary of 5,000 to 6,360 baht per month, a prosecutor with the same education qualifications earned 11,120 and plus a monthly position allowance of 3,500 to 21,000 Baht (The Royal Thai Police's Research Office, 2011) The Royal Thai Police's Research Office found that the police fringe benefits such as payment for overtime had been cut whereas the cost of living had increased.As a result, the police officers who had already been in debt struggled even more.When an emergency fund was needed, many could not access a loan from a bank or a formal financial institution as banks tended to limit their new household lending during the economy instability.Even though some financial institutions provided a loan specifically for government officials, some police officers did not have good credit history and found it was tiresome having to go through the complicated financial procedure.Many of them, therefore, were left with no other options than to take an informal loan with high interest rates.As a result, the debt kept mounting.
It can be concluded that the police officers' debt problems stemmed from basic needs expenses and social expenses relating to their career prospects.Debt problems had put many officers under a lot of stress (The Royal Thai Police's Research Office, 2011).As the police force had a crucial social duty to maintain law and order, prevent crime, and protect members of the public, their performance efficiency directly affected the quality of life for all citizens.The pressure from debt problems might affect the police standards of performance and encouraged corruption.The study found that alas, after the Financial Crisis, Thais 'police began paying off some debts and defaulting on others, causing big ripples in this elegant debt-driven rather than income-driven economic model.And it kicked off the race to get police officers back into a borrowing binge as result corruption has become a malignant cancer of the police in Thailand since the police debt were not corrected seriously.In present day, most Thais' people were lose faith or believed to the police officers because of the corruption.(Pasuk Pongpijit, 2016) The ongoing economic recession in Thailand has resulted in a high level of personal loans.The Savings and Credit Cooperative of the Royal Police Cadet Academy Limited saw a rise of loans from 127,832,843 baht in 2009 to 177,108,000 in 2010.It is very possible that the loans from RPCA Coop Ltd were more attractive than other lenders because it offered lower interest rates of 5% for a special personal loan, 7.25% for a personal loan, and 7.25% for an emergency loan (The Savings and Credit Cooperative of the Royal Police Cadet Academy, 2011 p. 2).Moreover, financial institutions are expected to remain cautious on providing loans, particularly housing loans and other long-term repayment loans in this year's first quarter due to concerns over loan quality, according to the central bank's latest survey.This creates even more attraction to Thais' police officer to register to RPCA Coop Ltd lenders instead of others' (Bangkok post, 2016).
RPCA Coop Ltd had revenue of 134,364,550 baht (The Savings and Credit Cooperative of the Royal Police Cadet Academy, 2011, p. 42) with 1,352 members, the RPCA Coop Ltd was set up with an aim to improve the members' a quality of life (The Savings and Credit Cooperative of the Royal Police Cadet Academy, 2011, p. 42).Quality of life improvement also includes alleviation of the members' economic problems.Debts from informal loans are considered one of the crucial economic problems in the Thai police force directly affecting the quality of life of the officers and their performance efficiency as well as encouraging corruption.Giving a financial support to help the members manage their informal loan repayment is one of the RPCA Coop Ltd's objectives especially when the debts keep mounting and the income is no longer sufficient to cover the expenses.
RPCA Coop Ltd's Informal Loan Debt Management Project was set up to alleviate the members' financial struggles.The project provides a special personal loan to its members to transfer their debts from informal lenders or loan sharks to their Cooperative account with both short-term and long-term repayment plans whereby the members can repay their debt in reduced payments that are more affordable.The repayment plans depend on the duration of membership, salary or the value of shares and an asset or a property to secure the loan required by the committee.
RPCA Coop Ltd has stepped in to resolve its members' debt problems from informal loans to improve their quality of life as stated in its objectives.RPCA Coop Ltd provides an easily accessed loan with low interest rates to the members to ease the financial burden of debt repayment.The project has a feasibility to rescue the members from their debt crisis resulting in an improved psychological wellbeing of the police officers and better performance efficiency.It is also hoped that a more financial stability will decrease the tendency of corruption in the police force.This, therefore, will give a positive impact to the society and the country.This study is particularly interested in evaluating RPCA Coop Ltd's Informal Loan Debt Management Project to see whether the project has achieved it outcomes and how the project has helped improving the performance efficiency of the police officers.
In the study, Maslow's hierarchy of needs will be employed as a main theoretical framework.The research question expected to be answered in this study concerns the unmet basic needs.When basic needs are unmet, the needs to fulfil such needs will be stronger.In the case of Thai police officers, if their basic needs, including the economic means, are still unmet, they will feel anxious and tense and focus their motivation to fulfil the unmet needs rather than dedicating to their job resulting in low performance efficiency.The study also aims to provide some guidelines in project evaluation and improvements as well as good practices for RPCA Coop Ltd to maximise the benefits to its members in improving their quality of life.

Research Problem
Has the RPCA Coop Ltd's Informal Loan Debt Management Project alleviated the members' debt repayment?How can the RPCA Coop Ltd's debt management support improve the performance efficiency of the police officers?
What are guidelines for project improvement and good practices to maximise the benefits of the members?

Research Objective
To study backgrounds of the RPCA Coop Ltd's Informal Loan Debt Management Project.
To evaluate the RPCA Coop's Informal Loan Debt Management Project in achieving the aim of alleviating the members' debt from informal loans and helping the members to have a more affordable repayment plan.
To provide guidelines for the project improvement.

Research Methodology
Triangulation research methodology was employed in this study using multiple data sources, both quantitative and qualitative, in an investigation of the same sample group which are 1) the borrowers of RPCA Coop's Informal Loan Debt Management Project 2) the authorities of RPCA Coop's Informal Loan Debt Management Project 3) the expert on Informal Loan Debt Management.
The methods used in the study are 1) documentary research: conceptualising, the authorities of such as the Federation of Savings and Credit Cooperatives of Thailand Limited's reports and meeting minutes, RPCA Coop Ltd's reports, reports from other Savings and Credit Cooperatives 2) questionnaire: questionnaires were given out to explore the operation of RPCA Coop Ltd, its member profile, and debt problems from informal loans 3) focus group: RPCA Coop's members, management team, and staff were asked about their views towards the operation of RPCA Coop Ltd and debt problems from informal loans.
The Discrepancy Evaluation Model (DEM) developed by Malcolm Provus (1966) was used to analyse the collective data received from the multiple data sources stated above in order to set out a desired standard on Informal Loan Debt Management Project and then comparing the standard to the RPCA Coop's Informal Loan Debt Management Project's actual performance (Output).
Using DEM model, the specific flaws in given project were identified and rectified by determining any discrepancies that exist between a pre-determined set of standards for the RPCA Coop's Informal Loan Debt Management Project.Finally, the decisions will be divided into two classes: 1) the project has successfully alleviated the members' debt repayment and the project should be continued when the discrepancy scores (objective-output) were less than 5; 2) the project has not been successfully alleviated the members' debt repayment and the project should be discontinued when the discrepancy scores (objective-output) were more than 5.

Has the RPCA Coop Ltd's Informal Loan Debt Management Project Alleviated the Members' Debt Repayment?
Using a collection of the rating scale from the World Bank Project Performance Rating Dataset carried out by IEG, the unit of evaluation analysis can be divided into six categories which are; 1) the debtors' attitude adjusting after attending to RPCA Coop Informal Loan Debt Management Project 2) The effectiveness and efficiency of debtors' debt reconstruction after attending to the Project (the bad loans become good loans) 3) The efficiency of information and data related to the projects' benefit provided to the debtors'4) the RPCA Coop executives' and debtors' involvement in the debt restructuring process 5) the Project transparency 6)The effectiveness and efficiency of the RPCA Coop debt reconstruction process (Sustainability) (World Bank, 2015).An evaluation of the RPCA Coop Ltd's Informal Loan Debt Management Project revealed that the project has successfully alleviated the members' debt repayment as the discrepancy scores equal to one.
A focus group was conducted.The participants in the focus group were RPCA Coop Ltd's members ages between 45-50 years old, most of whom had been a member for approximately 10 years.They had worked in the police force for 15-25 years.Most of them were administrative staff while some were trainers.Most of them were sergeant majors.Their salaries ranged from 19,000-28,000 baht per month.They found that their income did not meet the basic standard of living forcing them to find additional income to cover a shortfall in income of between 10,000-20,000 baht per month.They were not comfortable to discuss the types of second jobs they did.However, further investigation revealed that some second jobs included security guards and motorcycle taxi drivers.
The participants explained that their income was not sufficient to cover their expenses when they had unexpected expenses such as their children's tuition's fee, educational equipment, and medical or dental emergency.Informal loans were taken out for the basic needs of the families.Taking out a loan for luxury needs was very rare among the police officers and constituted less than 10% of the members.
When employing Maslow's hierarchy of needs to the circumstances of the police officers, it can be explained that the officers primarily focused on their physiological needs which are the physical requirements for human survival.In the modern society, money is a crucial factor in providing basic survival requirements.When their basic needs, such as a need of additional medical treatment which was not covered by government benefits, were not met, they were motivated to fulfil their unmet needs.
Earning a second income was a way to fulfil their unmet needs.However, when unexpected expenses emerged, such as medical treatment or tuition fee, they had no other alternatives than to take out an informal loan to meet the needs.
Members who took part in the Informal Loan Debt Management Project agreed that the project achieved its objective in alleviating the members' debt repayment through the project inputs, activities, and outputs which truly benefited the members.These included a reasonable amount of loan, appropriate interest rates, and fair management fees.The project successfully provided suitable welfare facilities for the members to alleviate their debt repayment and become debt-free from informal loans.
The study also revealed that a concept of basic needs varied from one person to another and was flexible depending on their circumstances.When the members had emergency expenses, the motivation to fulfil those unmet needs became stronger.In particular, families with children were found having more motivation than a single person.A definition of basic needs also varied.Some said owning a house was a basic need while others said to be able to earn a sufficient income to cover the expenses was basic needs and owning a house was a luxury.
RPCA Coop Ltd does not only provide financial services, it is also perceived as an institution providing emotional and spiritual security to the members.RPCA Coop Ltd's management have a close relationship with the members.Its admin staff members provide a caring service above and beyond the expectations.The caring service is not only provided to the members, but has stretched to their families and those they will leave behind.RPCA Coop Ltd's secured loan policy, for example, does not include the member's pension in a list of assets to be used against the loan.The RPCA Coop Ltd's staff explained that "If a pension is used against the secured loan, the member may not be able to leave anything for their family."RPCA Coop Ltd's received high praise from its members for its transparency and the staff's exceptional service.
Interestingly, in evaluating the performance of RPCA Coop Ltd, the members did not evaluate it against standard criteria, but compared it with their experience in using other financial institutions.If the service they received from RPCA Coop Ltd was better, they would then consider the Cooperative as above the standard."When I used a financial service from a financial institution, I was not informed about tax payment on a loan and ended up with a large amount of penalty.RPCA Coop Ltd is reliable.I can trust them.There are no hidden costs," one of the members shared his experience.
The members' flexible views of what basic needs involved may be opposed to Maslow's idea that human behaviour is a result of the environment from birth.These flexible leaned towards the existentialist belief in individual existence, freedom and choice.However, their freedom and choice have also been shaped by their environment.Negative experiences from other financial institutions have influenced their thoughts, beliefs, and decisions in evaluating the performance of RPCA Coop Ltd.
Apart from an ability to alleviate the members' debt repayment, the members were satisfied with RPCA Coop Ltd's benefits and activities provided for the members.One of the members suggested that "RPCA Coop Ltd provides a wide range of activities from a holiday trip to a small scholarship for our children (1,000 baht per person).However, it would be nice to have a lucky draw with highly valued prizes in the New Year celebration."All members were happy with the terms and conditions of the services.At the same time, they understood of limitations and constraints of RPCA Coop Ltd management.One of the members commented, "I am happy with the benefit associated with the member's death.It is not a huge amount, but reasonable for a small financial institution.RPCA Coop Ltd's office building is not spacious, but does not cause any inconvenience.It should be renovated if the budget allowed."It shows that the members sees a unity between RPCA Coop Ltd and themselves.For them, the benefits of RPCA Coop Ltd are of their own.A close relationship and a caring service make the members feel they are part of the "family".One of the members responded that "I'm satisfied with the service because we know each other very well."King Bhumibol Adulyadej's philosophy of sufficiency economy has been adopted as a guideline to improve the quality of life of the members.The philosophy addresses the root of the problem-a demand of unmet basic needs.If the members' basic needs are low, it will be easier for them to manage their expenses and repayment of the loans.

How Can the RPCA Coop Ltd's Debt Management Support Improve the Performance Efficiency of the Police Officers?
The study showed that the RPCA Coop Ltd's support in debt management could improve the performance efficiency of the police officer.It was found that, as reference to Maslow's hierarchy of needs, the members' most fundamental needs are at the bottom and the growth needs are at the top.The unmet basic needs will motivate them to fulfil the needs.When the needs are met, the desire will disappear.In terms of the service received from RPCA Coop, when the services have fulfilled their basic survival needs, the members do not demand any further improvements as it was stated that "RPCA Coop Ltd offers services and activities in accordance with a sufficiency economy initiative." When the members were asked to evaluate the level of performance of RPCA Coop Ltd as compared to other financial institutions and comment on RPCA Coop's limitations as well as suggestions, regarding Maslow's theory, it can be seen that after the physiological needs are fulfilled, the members has a tendency to show their sympathy and understanding towards the management of RPCA Coop Ltd as the feeling of belongingness has emerged.
However, when the basic survival needs are fulfilled, the next stage of needs will be developed.When being asked about additional services and activities from RPCA Coop Ltd after it is able to sufficiently provide all the basic services of a financial institution, the members suggested "a support to help the members rent or buy a house and a car, a funding or lucky draw of a house prize".It can be said that the members' stage of needs have moved up the hierarchy to security or safety needs.This has proved that when the physiological needs are met, human beings are not motivated to fulfil those needs any longer.Therefore, if the police officers' physiological needs are met, they will stop an urge for those needs.Instead, the higher stage of needs in the hierarchy will step in making them feel they need to feel respected, accepted, and valued by others.A desire for esteem will drive the officers to focus on better performance and responsibility to give them a sense of contribution and value.
Maslow stated that when one need is fulfilled, a person seeks to fulfil the next one, and so on.We always seek for better achievement.
This theory has been supported by the members' views.They admitted that households debts from informal loans made them feel demotivated at work.Some believed that "debt problems could lead to corruption when it might be the only way to provide an emergency income.In this case, RPCA Coop Ltd has played a crucial role in preventing a tendency of corruption.RPCA Coop Ltd offers a quick and easy access to an emergency loan for its members in which only the salary level and the duration of membership will be used as criteria to approve the loan." Concerning the effect of debt problems from informal loans, the members mentioned that "debt problems have a major impact to our lives as our income is not sufficient to cover the expenses.The expenses also increase at the start of the school year, for example.I cannot concentrate on working as I am constantly worried how I can manage to pay for my children's tuition fees." As Maslow explained, all human beings have a need for self-respect and self-esteem.However, when the physiological needs are not fulfilled, it is difficult to move to the higher stage of needs.Disrespectful behaviours such as corruption, therefore, are a result of an unmet physiological need.
The members admitted that their debt problems were a result of having an imbalanced life of considerably low income in which they could not set aside an emergency fund for when it was needed.Moreover, as having low income, it was difficult for them to get a decent amount of loan from a bank.There was also a chance that their loan application was rejected.When being asked whether the imbalance of income and expenses was a result of having low income or was an impact of the economic crisis, the members explained that it came from several factors."Salaries must be set according to the cost of living and the inflation rate.In the past, a starting salary of a police officer was equal 1 Baht of gold.Therefore, the current starting salary nowadays should be equal the price of 1 Baht of gold too."Human beings clearly have more desires than to fulfil the basic survival needs seeking for conditions to be able to accomplish their full potential.RPCA Coop Ltd, therefore, must aim to both meet the members' basic needs and their other levels of needs as being influenced by the economy and the change of the society.
It can be concluded that the root of debt problems from informal loans among the police officers is a result of having low income which does not meet the current minimum standard cost of living making it harder for a family to make ends meet and leaving them with no opportunity to save up for an emergency fund.When an emergency expense emerges, they, therefore, have no other choice than to seek for informal loans with high interest rates.The debt incurred from the loans has a big impact on their psychological wellbeing and their performance efficiency.It also indirectly encourages corruption.
The RPCA Coop Ltd's Informal Loan Debt Management Project has responded to the members' basic needs.The project has played an important role in alleviating the members' debt repayment by offering a higher limit loan with appropriate interest rates, and fair management fees.At the same time, RPCA Coop also offers a support to the members to become economically sufficient, for example, a personal and household goods repair and maintenance activity or a vegetable garden activity.It is hoped that by decreasing a level of basic survival needs, it will also decrease the motivation to find financial means to fulfil the needs through informal loans with an ultimate aim to help the members become debt-free.When the members' basic needs have been fulfilled, it is expected that they will put more emphasis in seeking to fulfil a higher level of needs, in particular, the need to be respected by others and job security through high performance efficiency.

What Are Guidelines for Project Improvement and Good Practices to Maximise the Benefits of the Members?
RPCA Coop Ltd's management, staff, and members commented on the operation of the RPCA Coop's Informal Loan Debt Management Project.They mentioned that communications and public relations were their weaknesses.Traditional ways of advertisement and publicity such as a paper-based memo or a notice board had been used.This created a one-way communication.A number of members might not see or read the memo and may miss an opportunity to take part in a given activity.RPCA Coop Ltd's management has proposed 1) memos are to be more frequent and a billboard to be used 2) RPCA Coop's to be regularly updated 3) RPCA Coop's newsletter to be launched.

Research Conclusion
RPCA Coop Ltd has set an organisation's mission and strategy to improve the quality of life of the members by becoming economically sufficient.It aims to help the members manage their household finance so that their income is sufficient to cover the expenses.The organisation also provides projects and activities to improve their quality of life and to have better wellbeing.RPCA Coop Ltd provides a financial support to help the members manage their debt repayment with an easily accessed loan with low interest rates making their repayment of informal loans is more affordable.It is hoped that the members will eventually regain their financial stability.As the management board and the members of RPCA Coop Ltd are officers in the Royal Police Cadet Academy, they have a close relationship and unity resulting in positive knowledge sharing and exchange between members helping improve the operation of RPCA Coop Ltd.
External land and property valuation services have been used in land valuation in the Informal Loan Debt Management Project for a loan approval process to show the organisation's transparency and good practices.RPCA Coop Ltd. also provides financial advice to the members.RPCA Coop Ltd's loan approval process and advice are concise and accurate.RPCA Coop Ltd provides its services with much lower management cost and fees.The profits will then be used for the benefits of the members.

Research Recommendation
Although word of mouth is a powerful communication tool for RPCA Coop Ltd to communicate with its members, its publicity can be improved.A project inputs and project activities are to be considered for a better output.One-way communications such as memos or a noticeboard may not reach all the members resulting in loss of opportunities for some members.The publicity can be enhanced by a more modern and ongoing tools of communication.At the same time, activities to encourage the members' sense of accountability and being financially disciplined can be organised.