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

SME Development Bank of ThailandSME Development Bank of Thailand

2

The BankThe Bank’’s Historys 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, SIFO’s 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, SIFO’s 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

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

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 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

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

Vision and MissionVision 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

The Importance of SMEs to the The Importance of SMEs to the

ThailandThailand’’s Economys Economy

Employment Creation

Employment Creation

Generating Foreign

Currency Income

Generating Foreign

Currency Income

Development for Various

Types of Skills

Development for Various

Types of Skills

Linked with Businesses of

Large Enterprises

Linked with Businesses of

Large Enterprises

Creation of New

Entrepreneurs

Creation of New

Entrepreneurs

Creating Competition and a High

Quality Service Culture

Creating Competition and a High

Quality Service Culture

Increasing Utilization of

Domestic Products

Increasing Utilization of

Domestic Products

5

Overview of the SME Sector in ThailandOverview of the SME Sector in Thailand

Number of Fixed Assets Number of Fixed AssetsEmployees excl. land Employees excl. land

(THB mm) (THB mm)

Manufacturing 50 or less 50 or less 51-200 > 50 to 200

Service 50 or less 50 or less 51-200 > 50 to 200

Wholesale 25 or less 50 or less 26-50 > 50 to 100

Retail 15 or less 30 or less 16-30 > 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

98.6% of all enterprises are SMEs

SME Classification: by employment and fixed assets

DefinitionDefinition

6

Unique Position in ThailandUnique Position in Thailand’’s Bank s Bank

MarketMarket

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 SolutionsSmart SMEs, First-time exporters

Export-ImportBank 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 SMEs’s loans approved by banks.

7

NetworkNetwork

1,614 Officers

9 Zones + 1 Bureau

5 Regional Offices

99 Business Development Centers

CreditCredit & Service& ServiceCreditCredit & Service& Service

General LoansGeneral Loans General LoansGeneral Loans

Long-termShort-termCommercial FacilitiesFactoring LoanLeasing and Hire-PurchaseLG

Policy and Special LoansPolicy and Special LoansPolicy and Special LoansPolicy and Special Loans

OTOP ,Grass RootsOTOP ,Grass Roots• Loans to Reslove Loans to Reslove Poor People’s DebtsPoor People’s Debts• OTOP LoansOTOP Loans

ServicesServicesServicesServices

Joint Venture Business DiagnosisBusiness TrainingBusiness Planning & DevelopmentMarketingNetworking

New SMEs Support New SMEs Support LoanLoan

• Franchise LoanFranchise Loan• sme Power for Tourism sme Power for Tourism • Loans for Small BusinessesLoans for Small Businesses

Food Business Support GroupFood Business Support Group• Thai Cuisine to the Thai Cuisine to the WorldWorld• Food Safety from Food Safety from Farm to ConsumerFarm to Consumer

SMEs Capacity SMEs Capacity

Development LoansDevelopment Loans •Machine FundMachine Fund•Machine Hire-Machine Hire-Purchase LoansPurchase Loans•Loans to Facilitate Loans to Facilitate Borrower’s Borrower’s Business RecoveryBusiness Recovery•SMEs PowerSMEs Power•Loan Aimed to Slow Loan Aimed to Slow Down LayoffsDown Layoffs

9

SME Development ServicesSME 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

Business Counselling Services

Marketing Services

Business Development

Services

Example LoanExample LoanExample LoanExample Loan

• Sme POWERSme POWER• Loans to help sustain Loans to help sustain employment and minimize employment and minimize layoffs layoffs • Sme POWER for Tourism Sme POWER for Tourism OperatorsOperators• SME Power for a New Start” Project• OTOPOTOP

1111

Loans to help sustain employment and minimize layoffsLoans to help sustain employment and minimize layoffs

Support SMES who were effected from Support SMES who were effected from Economic Crisis to operate and minimize Economic Crisis to operate and minimize

layoffs or expand increase in employment layoffs or expand increase in employment

Credit AmountCredit Amount

CollateralCollateral

Interest RateInterest Rate

Target GroupsTarget Groups

CriteriaCriteria

ObjectiveObjective

SMEs who registered and SMEs who registered and allowed in commitment with allowed in commitment with

Social Security OfficeSocial 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

1212

“ “ OTOP Loan”OTOP Loan”

Fees

Support in Funding . Production Support in Funding . Production System, Management, System, Management,

Product ,Marketing and Distribution Product ,Marketing and Distribution Channel Channel

Credit AmountCredit Amount

Interest Rate Interest Rate

Type of Loan Type of Loan

Target GroupsTarget Groups

CriteriaCriteria

ObjectiveObjective

Individual Person or General OTOP Individual Person or General OTOP Entrepreneurs who were guaranteed Entrepreneurs who were guaranteed by government organization such as by government organization such as

Mister of Industry , Mister of Industry , Minister of Commerce, etc.Minister of Commerce, etc.

Total 5,000 Million BathTotal 5,000 Million Bath Lending from 50,000 not Lending from 50,000 not

over 1,000,000 Bath Per case over 1,000,000 Bath Per case 1.1. Term Loan : Not over 5 Term Loan : Not over 5

yearsyears2.2. Short Term Loan : P/N Short Term Loan : P/N

MLR +1 % Per Year MLR +1 % Per Year

1313

“ “ OTOP Loan”OTOP Loan”

1,000 Bath Per case1,000 Bath Per case

Collateral Collateral

Fee Fee

1.1. Individual PersonIndividual Person2.2. Juristic Person Juristic Person 3.3. Cross Guarantee between Cross Guarantee between

Individual Person and Juristic Individual Person and Juristic PersonPerson

4.4. Others Others ( ( As the regulation of As the regulation of SME Bank SME Bank ) )

1414

Example of OTOP EntrepreneurExample of OTOP Entrepreneur

BHUTESUAN BHUTESUAN MASKSMASKS

15

Others Others ActivitieActivitie

s s

16

Mass Communication for ClientsMass Communication for Clients

Visit SME BANK Entrepreneurs by mass media for helping inPublic Relations includingcreating SMEs image

Visit SME BANK Entrepreneurs by mass media for helping inPublic Relations includingcreating SMEs image

16

SME CatalogueSME Catalogue

SME Catalogue for publishing SME BANK’s Client Product over 500 businesses targetgroup both domestic and internationalpurpose to support with increase in channel marketing

SME Catalogue for publishing SME BANK’s Client Product over 500 businesses targetgroup both domestic and internationalpurpose to support with increase in channel marketing

17

Market PlaceMarket Place

Holding the activities for helpingSME 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 helpingSME 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

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

Business MatchingBusiness 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

THANK YOUTHANK YOU