The facts of Bia Kud Chum


A tool for creating strong, self-reliant communities

October 2000



The setting is Kud Chum district in northeastern Thailand. The Green revolution and the liberalization of markets has led to community members becoming more and more dependent on externally set prices for rice, their main production crop. This monetary "value" assigned to their rice is determined by outside factors and does not relate in any way to local conditions and realities. Rural villagers have in the process entered a vicious cycle of debt, lost their community forests and indigenous knowledge, particularly in areas such as herbal medicines, and are as a result now facing things such as health problems and an exodus of village youth to Bangkok in search of work: we could go on.

Various villages in the aforementioned District, which is in Yasothon Province in the northeast of Thailand, have over 20 years experience in trying to alleviate the problems of debt and achieve self-reliance. Their efforts have led to the formation of many active community organizations. For example, we have seen the development of an association of traditional herbal practitioners, "self sufficiency groups", mixed agricultural initiatives, a community owned rice mill supporting chemical free rice production and mixed agricultural production, cooperative shops, and women’s groups producing soya milk, herbal shampoo and dishwashing liquid. The "self-sufficiency group", in the northeastern language called, "Hed Yoo Hed Gin", focuses on healthy production for household consumption first, selling only the surplus of their goods. They also promote the exchange of labour and tools amongst community members.

In September of 1998, representatives from Kud Chum attended a seminar on community currency systems and self-reliance held in the Surin Province. Thereafter, in a seminar aiming to assess development experiences of Kud Chum held in September of 1999, attending community members had identified local exchange as a way to increase self-reliance and alleviate some of the problems the community was facing, in particular, debt. Realizing that community currency systems could help facilitate the development of local exchange sparked the creation of a local exchange system that would later become known as Bia Kud Chum. A working committee was formed which worked on the nuts and bolts of setting up a community exchange system in five villages.

Objectives of Bia Kud Chum

  1. Social
    1. To increase self-reliance in the community and to lower dependence on external markets
    2. To set up activities that increase diversity and sustainability and revitalize indigenous knowledge
    3. To create good relationships between people in the community
  2. Economic
    1. To reduce the outflow of money (Thai baht) and resources from the community
    2. To save community members’ money (baht)

Implementation Process

  1. Selection of the system

A coupon system (or NOTES-based system) was considered most appropriate for the community when compared to other systems, particularly those based on accounting. As community members in Kud Chum are not very familiar with accounting practices, the coupon system was seen as more user friendly and easier to understand.

2. Why the name "Bia Kud Chum"?

From a wide variety of suggestions it was agreed that bia should be the name of the trade medium of the community currency system. In the Northeastern (Isan) language, ‘bia’ means ‘seedling’ and it reflects the communities’ aim to develop into a strong, thriving community like small seedlings growing into large trees.

  1. The design of the bia notes
  2. Community members produced poems and paintings illustrating the way of life and local customs and traditions of villagers in the northeast of Thailand. Schoolchildren joined in a competition, after which a selection of their work was made for the screening and printing of the bia notes.

  3. Managing the bia system
    1. The bia working committee performs three main functions
  1. Accounting, which is carried out by elected managers of the ‘Community Self-Reliance Development Group’, formerly known as the Bia Bank. The managers facilitate the withdrawals and deposits of bia and administrate the bia member accounts.
  2. Extension activities to support efficient and balanced use of bia between members
  3. Monitoring and Evaluation of the use of bia.
    1. The use of bia
  1. Group members have a credit limit of 500 bia, which they can withdraw from the "Bia Bank".
  2. Bia cannot be exchanged for baht
  3. There is no interest charged on either bia withdrawn or on bia deposited into a members account
  4. Exchanging goods and services in the participating villages can be done in several ways; using bia only, using bia together with baht or using baht only depending on what the buyer and seller agree upon.
    1. Membership
    2. Only members of the five mentioned villages are allowed to become members of the bia system.

    3. Activities supporting local exchange
  1. A Community Market is held in turn by each village every Saturday.
  2. Additional skills training for community members takes place in order to support such things as the diversification of local production to meet local demand.

Bia Kud Chum: against the law?

A threat to national security!!!

The community started to use the bia for the first time in March 2000. Its use attracted much attention from the mass media. As a result, officials from district and provincial government offices, police, military, internal security, the Prime Minster’s Office and the Central Bank of Thailand were among those to visit the community to investigate the bia system. Some feared the use of bia might violate the law or could be a danger to national security. Some even suggested it might be seen as a strategy to create an independent state. Due to the attention mentioned above, and under the direction of the Bank of Thailand, the use of the bia was suspended at the end of April, after only one month in circulation. At that point in time, there were 120 bia members of which 33 had withdrawn a total of 7,000 bia from the Community Self-Reliance Development Group (bia bank).

In July, at a meeting of the Board of the Bank of Thailand, it was finally concluded that the use of Bia Kud Chum violated Article 9 of the Currency Act of 1958. This article ‘forbids anyone from making, distributing, using or issuing any material to replace currency, except where permission has been granted by the Minister of Finance’. In addition, the Bia bank was said to violate Article 9 of the Commercial Banking Act of 1962 which ‘forbids individuals other than commercial banks from using the word ‘bank’ or other words with the same meaning’.

As a result, the Bia Kud Chum working committee was forced to suspend the use of bia and decided to change the name of the system from ‘bia Bank’ to the ‘Community Self-Reliance Development Group’. They also solicited the help of the Law Society of Thailand to support them in submitting a request to the Minister of Finance to review their case.

What’s next?

In their efforts to become self-reliant, the villagers of the five communities have been accused of breaking the law, an accusation that is far from being justified. Even though the Government has announced its intention to encourage the development of self-reliant and strong community economies, the case of Bia Kud Chum shows they are actually preventing this from really happening (why is it that when big businesses issue their coupons there seem to be no legal problems, whilst when it comes to villagers, there is?). Perhaps it is time for government officials to join with Kud Chum villagers in exploring ways to legitimize the Bia so that community self-reliant economics and strong communities can become a reality.

"Bia" Kud Chum is indeed a seedling that, as it takes root, will help to bring about self-reliance for communities in Thailand. However, before seedlings can become great trees, and before these communities can achieve the self-reliance that they deserve, they will face many obstacles. The drive to overcome these obstacles and to create change requires the collective energies of people from a variety of backgrounds. There is a need to think together, learn together, to explore alternatives together and to support each other in this quest for more just and sustainable economic systems.

If you would like to know more about the plight of Bia Kud Chum or the Thai Community Currency Project (TCCS), please contact us at the following address:

Thai Community Currency Systems Project (TCCS)

Attention: Wanlop Pichpongsa

Local Development Institute (LDI)

c/o 2nd Building, Department of Medical Science,

693 Bumrungmuang Road,

Pomprab District, Bangkok 10110


Tel +66-2-621-7810

Fax +66-2-621-8042


Website: http:\\\