0. SME Development Bank of Thailand

1. 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 to Small and Medium Development Bank of Thailand (SME Bank), with the objective of providing financial and developing services to SMEs
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
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

2. “To be a financial institute that assists and supports SMEs”
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
Thank 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 strength
In 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 economy
To create financial services which are responsive to the needs of strategic SMEs
To strive for efficiency and good governance in all personnel and work processes
To 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 development
To ensure widest public awareness of the Bank's roles, responsibilities and good repute
To create and develop new entrepreneurs, in collaboration with alliances
Through 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 policy
Incubation - Business development services, through counselling, training and access to knowledge base, to help enhance SMEs’ capabilities and develop their businesses and markets
Resourcefulness - Work with a network of other service providers to deliver integrated financial and business development services to each client
Speed - Prompt and efficient service through continuous improvement of work process, network, and technology
Transparency - A “White Bank” with transparent procedures and a high standard of corporate governance
Above 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 Creation
Generating Foreign Currency Income
Development for Various Types of Skills
Linked with Businesses of Large Enterprises
Creation of New Entrepreneurs
SME 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 creation
Development of various types of skills for both employees and employers
Creation of new enterprenuers
Increasing utilization of domestic products
Creating competition and a high quality service culture
Linked with businesses of large enterprises
Generating foreign currency income
Creating Competition and a High Quality Service Culture
Increasing Utilization of Domestic Products

4. Overview of the SME Sector in Thailand
98.6% of all enterprises are SMEs
Production Value 39.4% of GDP (Not included Agriculture)
Export Value 29.0%of Thailand Total
Employment 76.4%of Thailand Total Employment
SME Classification: by employment and fixed assets
Definition
Small
Medium
Number of Fixed Assets Number of Fixed Assets
Employees excl. land Employees excl. land
(THB mm) (THB mm)
Manufacturing 50 or less 50 or less > 50 to 200
Service 50 or less 50 or less > 50 to 200
Wholesale 25 or less 50 or less > 50 to 100
Retail 15 or less 30 or less > 30 to 60
The 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 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
Specialized Financial Institutions for SMEs
SME Development Bank of Thailand
Bank of Agriculture and Agricultural Cooperatives
These policy banks collaborate to develop the grass-root economic system…
…but each bank has its own client base
“SME Bank”
Building an entrepreneurial society
Total Solutions
Smart SMEs, First-time exporters
“Rural Development Bank”
On-farm and off-farm community enterprises
Export-Import Bank of Thailand
Government Savings Bank
“Exporter’s Bank”
Full banking service Export insurance and investment abroad
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, but rather, supplement them.
SME Bank collaborates with other special financial institutions and provides funding to SMEs which cannot obtain loans from commercial banks
SME 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 capital
Smalll Business Credit Guarantee Corporation (SCBG)
To provide Credit Guarantee for SMEs’s loans approved by banks.

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

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

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

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

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

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

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

13. Example of OTOP Entrepreneur
BHUTESUAN
MASKS

14. Others Activities

15. SME Catalogue Mass Communication for Clients
Visit SME BANK Entrepreneurs
by mass media for helping in
Public Relations including
creating SMEs image
SME Catalogue
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 15

16. 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

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

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

19. THANK YOU