Presentation on theme: "The Bank’s History The government has a long history in supporting small and medium enterprises. In 2002, it changed the role and name of the Policy Bank."— Presentation transcript:
1 The Bank’s HistoryThe 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 SMEsEstablished as the Small Industry Finance Office (SIFO) under the Department of Industrial Promotion, Ministry of Industry to provide financial support to small industriesAs a government-owned financial institution and solely funded from the National Budget, SIFO’s services was limited and could not enjoy all the flexibility enjoyed by other FIsRe-established by Act of Parliament as the Small Industries Finance Corporation (SIFC) under the Ministry of Finance and Ministry of IndustryCommenced operations in Jan 1993 with an initial registered capital of THB 300 million, SIFC was able to source funds both domestically and overseasSIFC was recapitalized to THB 2.8 billion, with Ministry of Finance holding 92% of the sharesReactivated 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
2 “To be a financial institute that assists and supports SMEs” Vision and MissionVision“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 financialassistance- Develop an innovative communication technology andeffective organizationThank you, Mr Nophadol Bhandhugravi. I would first like to highlight SME Bank’s Vision, Mission and Strategy.SME Bank’s vision is to be the leading bank in providing quality services for strengthening and development of SMEs, in the drive towards sustainable economic growth, and to be a pillar of good governance, efficiency, and strengthIn achieving SME Bank’s vision to finance and develop SME’s, the management’s goals include:To support the strengthening and competitiveness enhancement of strategic SMEs which are the foundation of the national economyTo create financial services which are responsive to the needs of strategic SMEsTo strive for efficiency and good governance in all personnel and work processesTo develop a network of strategic alliances with public and private-sector, domestic and overseas, in order to draw upon the knowledge and expertise in SME and economic developmentTo ensure widest public awareness of the Bank's roles, responsibilities and good reputeTo create and develop new entrepreneurs, in collaboration with alliancesThrough our vision and mission, we believe that clients are our first priority. Therefore, we have created our FIRST principle:Focus – to Focus on strategic SMEs, in accordance with government policyIncubation - Business development services, through counselling, training and access to knowledge base, to help enhance SMEs’ capabilities and develop their businesses and marketsResourcefulness - Work with a network of other service providers to deliver integrated financial and business development services to each clientSpeed - Prompt and efficient service through continuous improvement of work process, network, and technologyTransparency - A “White Bank” with transparent procedures and a high standard of corporate governanceAbove all, SME Bank will continue to serve its purpose by remaining as the government’s SME development policy vehicle.
3 The Importance of SMEs to the Thailand’s Economy Employment CreationGenerating Foreign Currency IncomeDevelopment for Various Types of SkillsLinked with Businesses of Large EnterprisesCreation of New EntrepreneursSME sector’s contribution to Thailand’s economy are significant. The SMEs account for more than 60% of non-farm employment; 38% of GDP; and 45% of manufactured exports.Among the SME sector’s major contributions are;Employment creationDevelopment of various types of skills for both employees and employersCreation of new enterprenuersIncreasing utilization of domestic productsCreating competition and a high quality service cultureLinked with businesses of large enterprisesGenerating foreign currency incomeCreating Competition and a High Quality Service CultureIncreasing Utilization of Domestic Products
4 Overview of the SME Sector in Thailand 98.6% of all enterprises are SMEsProduction Value 39.4% of GDP (Not included Agriculture)Export Value 29.0%of Thailand TotalEmployment 76.4%of Thailand Total EmploymentSME Classification: by employment and fixed assetsDefinitionSmallMediumNumber of Fixed Assets Number of Fixed AssetsEmployees excl. land Employees excl. land(THB mm) (THB mm)Manufacturing 50 or less 50 or less > 50 to 200Service 50 or less 50 or less > 50 to 200Wholesale 25 or less 50 or less > 50 to 100Retail 15 or less 30 or less > 30 to 60The SME Sector is a very important sector in Thailand.In 2003, the National Statistics Office and SME Promotion Office undertook a survey on commercial and service businesses in Thailand. The total number of small, medium and large enterprises throughout the country was estimated at 2.01 million. Out of these, 99% or approximately 1.99 million are SMEs.
5 Unique Position in Thailand’s Bank Market 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 banksSME Bank collaborates with other special financial institutions and provides funding to SMEs which cannot obtain loans from commercial banksSME 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 areasSpecialized Financial Institutions for SMEsSME Development Bank of ThailandBank of Agriculture and Agricultural CooperativesThese policy banks collaborate to develop the grass-root economic system……but each bank has its own client base“SME Bank”Building an entrepreneurial societyTotal SolutionsSmart SMEs, First-time exporters“Rural Development Bank”On-farm and off-farm community enterprisesExport-Import Bank of ThailandGovernment Savings Bank“Exporter’s Bank”Full banking service Export insurance and investment abroadSME Bank is set-up as an organization for which profit maximization is not the primary goalIt is the Bank’s policy not to compete with commercial banks, but rather, supplement them.SME Bank collaborates with other special financial institutions and provides funding to SMEs which cannot obtain loans from commercial banksSME Bank also does not compete directly with the other Specialized Financial Institutions. Each Specialised Financial has their own clientele, and are focused on developing different types of SMEs.“People’s Bank”To develop human capitalSmalll Business Credit Guarantee Corporation (SCBG)To provide Credit Guarantee for SMEs’s loans approved by banks.
6 99 Business Development Centers Network5 Regional Offices9 Zones + 1 Bureau99 Business Development Centers1,614 Officers
7 SMEs Capacity Development Loans Food Business Support Group Credit & ServiceGeneral LoansServicesLong-termShort-termCommercial FacilitiesFactoring LoanLeasing and Hire-PurchaseLGJoint VentureBusiness DiagnosisBusiness TrainingBusiness Planning & DevelopmentMarketingNetworkingPolicy and Special LoansSMEs Capacity Development LoansMachine FundMachine Hire-Purchase LoansLoans to Facilitate Borrower’sBusiness RecoverySMEs PowerLoan Aimed to Slow Down LayoffsOTOP ,Grass RootsLoans to Reslove Poor People’s DebtsOTOP LoansFood Business Support GroupThai Cuisine to the WorldFood Safety from Farm to ConsumerNew SMEs Support LoanFranchise Loansme Power for TourismLoans for Small Businesses
8 SME Development Services New Entrepreneur Creation Program,Accounting System and Software ApplicationPOS System Training for Small Retail BusinessIntellectual Property Management TrainingTax Laws and Planning TrainingModern Financial Management TrainingMarket Research and New Product Development TrainingFree of charge to access SME Bank’s publicity channelsSME Operation Diagnosis ServiceWorkshops (In-house Training & On the job training)Service of On-site Deep Counseling
9 Loans to help sustain employment and minimize layoffs Example LoanSme POWERLoans to help sustain employment and minimize layoffsSme POWER for Tourism OperatorsSME Power for a New Start” ProjectOTOP
10 Loans to help sustain employment and minimize layoffs ObjectiveSupport SMES who were effected from Economic Crisis to operate and minimize layoffs or expand increase in employmentTarget GroupsSMEs who registered and allowed in commitment with Social Security OfficeNot over 50 Million Baht(Credit Amount of Project 6,000 million baht )Credit AmountCriteriaInterest Rate5% 5 years (Not over year 2014)CollateralAs usual Criteria
11 “ OTOP Loan”ObjectiveSupport in Funding . Production System, Management, Product ,Marketing and Distribution ChannelTarget GroupsIndividual Person or General OTOP Entrepreneurs who were guaranteed by government organization such as Mister of Industry , Minister of Commerce, etc.FeesTotal 5,000 Million BathLending from 50,000 not over 1,000,000 Bath Per caseCredit AmountCriteriaTerm Loan : Not over 5 yearsShort Term Loan : P/NType of LoanInterest RateMLR +1 % Per Year
12 1,000 Bath Per case “ OTOP Loan” Individual Person Juristic Person Fee1,000 Bath Per caseIndividual PersonJuristic PersonCross Guarantee between Individual Person and Juristic PersonOthers ( As the regulation of SME Bank )Collateral
15 SME Catalogue Mass Communication for Clients Visit SME BANK Entrepreneursby mass media for helping inPublic Relations includingcreating SMEs imageSME CatalogueSME Cataloguefor publishing SME BANK’s Client Productover 500 businesses targetgroup both domestic and internationalpurpose to support with increase inchannel marketing15
16 Market Place Holding the activities for helping SME BANK’s Client to sell their productsat various place such as SME BANKTOWER and move on to governmentorganization and alliance place indomestic and internationali.e.Ministry of Finance, Ministry of Industry,PTT included other province of Thailand
17 Diagnosis and Kai-zen for - Consulting for implementation Business DiagnosisShin – Dan ProgramDiagnosis and Kai-zen forSME BANK ClientsSeminar to preparefor improvementand- Consulting for implementation
18 Business Matching Holding Business Matching with Japan Finance CooperationinAutomobileandElectronic Spare Parts Cluster