Page 97 - kpi16531

0 นวัตกรรมการพัฒนารายได้
ขององค์กรปกครองส่วนท้องถิ่น

. Borrowing and Bond Financing

Borrowing is a tool to increase revenues for the local governments. It is a way to access
the funding. The main reason for local governments to borrow is limited or insufficient incomes
for expenses of the organization. The revenues include local collection and collection from the

Central Government and subsidies. The limited incomes affect the local public services in
quality, efficiency and adequacy. In the borrowing of local systems can be classified into two
main areas.

= Bank lending is how the loan is commonly used in developing countries, in the local
districts with a few loans, or the local restricts with no prior financial credit. In this
manner, the loan can be done several ways such as loan through a bank or financial

institution. Borrowing from local government funds of the local governments such as
the Fund for Municipal Affairs, funds of the Provincial Administration, and funds for
local development.

Examples

China : China’s central government issued regulations prohibiting local

governments to take a loan from financial institutions and capital markets directly.
Thus, local governments must establish a financial intermediary (Local
Government Financing Vehicle: LGFV) to make a loan from financial institutions

for local governments.

The Czech Republic : The Czech Republic’s local government makes a loan

through financial institutions called Czech Municipal Finance Corporation (CMFC),
the intermediary to assess the financial situation who helps match between the
requested loan (local) and the loaners (A bank or other financial institutions)
appropriately.

= Loan by Municipal / Local Bond Issuance is how the loan is commonly used in

developed countries particularly in the United States because these countries have a
variety of financial structures, financial stability, stable debt markets (both primary and
secondary market), and high credit ratings. The types of local bonds can be classified
into two main forms: 1) General Obligation bonds or Tax-backed bonds, and 2)

Revenue Bonds.