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SME Development Bank of Thailand. 1 The Bank s History Established as the Small Industry Finance Office (SIFO) under the Department of Industrial Promotion,

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Presentation on theme: "SME Development Bank of Thailand. 1 The Bank s History Established as the Small Industry Finance Office (SIFO) under the Department of Industrial Promotion,"— Presentation transcript:

1 SME Development Bank of Thailand

2 1 The Bank s History Established as the Small Industry Finance Office (SIFO) under the Department of Industrial Promotion, Ministry of Industry to provide financial support to small industries As a government-owned financial institution and solely funded from the National Budget, SIFOs services was limited and could not enjoy all the flexibility enjoyed by other FIs Established as the Small Industry Finance Office (SIFO) under the Department of Industrial Promotion, Ministry of Industry to provide financial support to small industries As a government-owned financial institution and solely funded from the National Budget, SIFOs services was limited and could not enjoy all the flexibility enjoyed by other FIs The government has a long history in supporting small and medium enterprises. In 2002, it changed the role and name of the Policy Bank to Small and Medium Development Bank of Thailand (SME Bank), with the objective of providing financial and developing services to SMEs Re-established by Act of Parliament as the Small Industries Finance Corporation (SIFC) under the Ministry of Finance and Ministry of Industry Commenced operations in Jan 1993 with an initial registered capital of THB 300 million, SIFC was able to source funds both domestically and overseas SIFC was recapitalized to THB 2.8 billion, with Ministry of Finance holding 92% of the shares Reactivated by Act of Parliament as the Small and Medium Development Bank of Thailand (SME Bank) under Ministry of Finance and Ministry of Industry. SME Bank was formally established on 20 Dec 2002 with all assets, businesses, debts, capital, profits, reserves, etc transferred from SIFC. The authorized capital has been increased to THB 10 billion

3 2 Vision and Mission Vision To be a financial institute that assists and supports SMEs Mission - Support the government policies to assist and support SMEs - Financially serve and respond to the needs of Thai SMEs - Promote and develop Thai SMEs along with the financial assistance - Develop an innovative communication technology and effective organization

4 3 The Importance of SMEs to the Thailand s Economy Employment Creation Generating Foreign Currency Income Development for Various Types of Skills Linked with Businesses of Large Enterprises Creation of New Entrepreneurs Creating Competition and a High Quality Service Culture Increasing Utilization of Domestic Products

5 4 Overview of the SME Sector in Thailand Number ofFixed AssetsNumber ofFixed Assets Employeesexcl. landEmployeesexcl. land(THB mm) Manufacturing50 or less 50 or less51-200> 50 to 200 Service50 or less 50 or less51-200> 50 to 200 Wholesale25 or less50 or less26-50> 50 to 100 Retail15 or less30 or less16-30> 30 to 60 Small Medium Production Value 39.4% of GDP (Not included Agriculture) Export Value 29.0%of Thailand Total Employment 76.4%of Thailand Total Employment Production Value 39.4% of GDP (Not included Agriculture) Export Value 29.0%of Thailand Total Employment 76.4%of Thailand Total Employment 98.6% of all enterprises are SMEs SME Classification: by employment and fixed assets Definition

6 5 Unique Position in Thailand s Bank Market Government Savings Bank People s Bank To develop human capital Bank of Agriculture and Agricultural Cooperatives Rural Development Bank On-farm and off-farm community enterprises SME Development Bank of Thailand SME Bank Building an entrepreneurial society Total Solutions Smart SMEs, First-time exporters Export-Import Bank of Thailand Exporter s Bank Full banking service Export insurance and investment abroad These policy banks collaborate to develop the grass- root economic system … … but each bank has its own client base Specialized Financial Institutions for SMEs SME Bank is set-up as an organization for which profit maximization is not the primary goal - it is the Bank s policy not to compete with commercial banks SME Bank collaborates with other special financial institutions and provides funding to SMEs which cannot obtain loans from commercial banks SME Bank does not compete directly with the other SFIs - Bank of Agriculture and Agricultural Cooperatives and Government Savings Bank performs lending roles with an emphasis on different areas Smalll Business Credit Guarantee Corporation (SCBG) To provide Credit Guarantee for SMEss loans approved by banks.

7 6 Network 1,614 Officers 9 Zones + 1 Bureau 5 Regional Offices 99 Business Development Centers

8 Credit & Service General Loans Long-term Short-term Commercial Facilities Factoring Loan Leasing and Hire-Purchase LG Policy and Special Loans OTOP,Grass Roots Loans to Reslove Poor Peoples Debts Loans to Reslove Poor Peoples Debts OTOP Loans OTOP Loans Services Joint Venture Business Diagnosis Business Training Business Planning & Development Marketing Networking New SMEs Support Loan Franchise Loan Franchise Loan sme Power for Tourism sme Power for Tourism Loans for Small Businesses Loans for Small Businesses Food Business Support Group Thai Cuisine to the World Thai Cuisine to the World Food Safety from Farm to Consumer Food Safety from Farm to Consumer SMEs Capacity Development Loans Machine FundMachine Fund Machine Hire-Purchase LoansMachine Hire-Purchase Loans Loans to Facilitate BorrowersLoans to Facilitate Borrowers Business Recovery Business Recovery SMEs PowerSMEs Power Loan Aimed to Slow Down LayoffsLoan Aimed to Slow Down Layoffs

9 8 SME Development Services New Entrepreneur Creation Program, Accounting System and Software Application POS System Training for Small Retail Business Intellectual Property Management Training Tax Laws and Planning Training Modern Financial Management Training Market Research and New Product Development Training Free of charge to access SME Bank s publicity channels SME Operation Diagnosis Service Workshops (In-house Training & On the job training) Service of On-site Deep Counseling

10 Example Loan Sme POWER Sme POWER Loans to help sustain employment and minimize layoffs Loans to help sustain employment and minimize layoffs Sme POWER for Tourism Operators Sme POWER for Tourism Operators SME Power for a New Start Project OTOP OTOP

11 10 Loans to help sustain employment and minimize layoffs Support SMES who were effected from Economic Crisis to operate and minimize layoffs or expand increase in employment Credit Amount Collateral Interest Rate Target Groups Criteria Objective SMEs who registered and allowed in commitment with Social Security Office Not over 50 Million Baht (Credit Amount of Project 6,000 million baht ) 5% 5 years (Not over year 2014) As usual Criteria

12 11 OTOP Loan OTOP Loan Fees Support in Funding. Production System, Management, Product,Marketing and Distribution Channel Credit Amount Interest Rate Type of Loan Target Groups Criteria Objective Individual Person or General OTOP Entrepreneurs who were guaranteed by government organization such as Mister of Industry, Minister of Commerce, etc. Total 5,000 Million Bath Lending from 50,000 not over 1,000,000 Bath Per case Lending from 50,000 not over 1,000,000 Bath Per case 1.Term Loan : Not over 5 years 2.Short Term Loan : P/N MLR +1 % Per Year

13 12 OTOP Loan OTOP Loan 1,000 Bath Per case 1,000 Bath Per case Collateral Fee 1.Individual Person 2.Juristic Person 3.Cross Guarantee between Individual Person and Juristic Person 4.Others ( As the regulation of SME Bank )

14 13 Example of OTOP Entrepreneur BHUTESUANMASKS

15 14 Others Activities

16 15 Mass Communication for Clients Visit SME BANK Entrepreneurs by mass media for helping in Public Relations including creating SMEs image Visit SME BANK Entrepreneurs by mass media for helping in Public Relations including creating SMEs image 15 SME Catalogue for publishing SME BANK s Client Product over 500 businesses target group both domestic and international purpose to support with increase in channel marketing SME Catalogue for publishing SME BANK s Client Product over 500 businesses target group both domestic and international purpose to support with increase in channel marketing

17 16 Market Place Market Place Holding the activities for helping SME BANK s Client to sell their products at various place such as SME BANK TOWER and move on to government organization and alliance place in domestic and international i.e. Ministry of Finance, Ministry of Industry, PTT included other province of Thailand Holding the activities for helping SME BANK s Client to sell their products at various place such as SME BANK TOWER and move on to government organization and alliance place in domestic and international i.e. Ministry of Finance, Ministry of Industry, PTT included other province of Thailand

18 17 Business Diagnosis Business Diagnosis Shin – Dan Program -Diagnosis and Kai-zen for SME BANK Clients -Seminar to prepare for improvement and - Consulting for implementation Shin – Dan Program -Diagnosis and Kai-zen for SME BANK Clients -Seminar to prepare for improvement and - Consulting for implementation

19 18 Business Matching Business Matching Holding Business Matching with Japan Finance Cooperation in Automobile and Electronic Spare Parts Cluster Holding Business Matching with Japan Finance Cooperation in Automobile and Electronic Spare Parts Cluster

20 THANK YOU


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