Bangkok: The Bank for Agriculture and Agricultural Cooperatives (BAAC) advises members of funeral benefit associations to monitor the fund's status through the "Smart Chapa" app.
According to Thai News Agency, the BAAC has been overseeing the financial health of funeral service associations and identified management issues in only 50 out of approximately 3,800 associations nationwide. Members are encouraged to use the "Smart Chapa" app for real-time updates on their fund status.
Ms. Phromkorn Phromkhatikaew, Assistant Manager of BAAC, addressed concerns regarding delays in compensation payments after member deaths. While acknowledging that funeral benefit associations operate under the Funeral Benefit Act of 2002 with independent management, she emphasized that BAAC's role is advisory. The associations deduct a portion of their capital for operating expenses, and the fund's balance relies on membership size to cover costs.
The BAAC is actively inspecting funeral assistance associations, categorizing them by risk levels: green, yellow, and red. Of the 517 associations analyzed, approximately 50 high-risk associations (red) need close monitoring due to issues like low membership growth and potential internal corruption. About 70 associations (yellow) show moderate risks that can be mitigated with improvements, while the green group represents well-managed entities.
Corruption among association executives has been identified, with officials sometimes failing to deposit collected funds into BAAC accounts. To combat this, BAAC has developed the "Smart Chapa" system, investing millions to enhance transparency. The app allows members to access account information, track funds, and receive notifications swiftly, ensuring all transactions are recorded and receipts generated automatically.
The payment structure for funeral benefits involves three installments to cover initial expenses and balance payments. Despite some misunderstandings about the system being seen as a savings plan, it is intended as a form of protection. Mr. Phromkorn highlighted that annual contributions serve as a safeguard, with lump sum payments equivalent to contributions provided upon a member's death.
The Funeral Assistance Association, established over 50 years ago, serves as a risk management tool for farmers, alleviating funeral expenses and reducing potential debt burdens. While BAAC serves as an advisor without direct control, the Smart Chapa system ensures transparency and member empowerment. The associations originated in 1975, providing a community solution to manage funeral costs and prevent debt from transferring to descendants.
The association's funds are allocated for funeral expenses, debt repayment, and inheritance for heirs. Although BAAC does not mandate association membership for borrowing, it may recommend participation to mitigate debt burdens. The financial support offered by these associations remains crucial for Thai farmers.