Abstract: This essay shows how credit markets influence development, and argues that the impact of improvements in credit markets is quantitatively significant. It begins by establishing the fact that access to credit is limited, emphasizing the magnitudes. It then goes on to the potential importance of financial sector development, again quantifying the impact. The merits of different interventions are also discussed. The policy recommendations in this essay are based on estimated versions of the Thai reality, filtered through the lens of artificial environments, or what economists call models.

Keywords: credit markets, Thailand, financial sector, microfinance institutions, expanded credit,