Adbi wp583 PDF
Adbi wp583 PDF
Adbi wp583 PDF
Tientip Subhanij
No. 583
July 2016
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Abstract
In Thailand, the government has long recognized the importance of small and medium-sized
enterprises (SMEs) to the economy and has given a large amount of financial support to this
sector. Still, SMEs are not able to catch up with larger enterprises and the constraints to
SME financing remain the main topic of policy discussion today. Against this background,
the important issue for Thailand may not be about the lack of financial assistance per se
but about how to design an appropriate market-friendly business model and supporting
scheme to help SMEs gain access to credit on a sustainable basis. Given the success of
microfinance around the world, a large number of commercial banks have made a profitable
business out of this sector. This paper explores various business models by commercial
banks in microfinance and provides policy implications for Thailand. By making use of
commercial banks' competitive advantage, Thailand can create a more market-friendly
environment for SME financing. This will also ensure that lending to small-business clients is
not a burden to the government and is self-sustaining in the long run.
Contents
1. Introduction ................................................................................................................ 3
References ......................................................................................................................... 26
ADBI Working Paper 583 Subhanij
1. INTRODUCTION
Small and medium-sized enterprises (SMEs) play a central role in enhancing economic
dynamism and employment opportunities in Thailand. Development of this sector
has, therefore, been widely acknowledged as a crucial strategy for growth. Compared
with large enterprises, which have many financial channels including capital markets,
SMEs depend primarily on bank loans to finance their business operations. However,
one of the main obstacles for SMEs remains the lack of adequate access to financial
services (Ayyagari, Demirgüç-Kunt, and Maksimovic 2006). 1 SMEs, especially small
enterprises, usually have difficulties in obtaining finance, and hence are prevented from
contributing fully to economic development.
In countries around the world, including Thailand, the lack of bank financing to
small enterprises is often regarded as one of the reasons for income distribution
problems and poor economic performance. Past studies have also shown that financial
access helps generate more new firms, which are generally vibrant and creative
(Demirgüç-Kunt, Beck, and Honohan 2008). For these reasons, policies to promote
inclusive finance should be prioritized as one of the most important economic
development policies.
This paper focuses primarily on bank financing of SMEs and discusses possible
strategies for banks to enter this market. It analyzes cross-country experience in bank
downscaling 2 strategies and discusses the recent status of the SME financing
environment in Thailand. It then provides policy suggestions to enhance SME financial
access in Thailand. The study is divided into five sections. Section 2 reviews the
literature and some previous empirical work. Section 3 analyzes cross-country
experiences with banking business models and discusses lessons learned. Section 4
outlines the SME landscape and its financing environment in Thailand. Section 5
concludes with policy recommendations.
2. LITERATURE REVIEW
Small business formation and growth are impacted significantly by imperfections in
bank credit markets. Small firms are different from larger firms because they have
information constraints. Their businesses tend to be more informal and have
inadequate business planning. As a result, they do not have enough information
available for lenders to evaluate their performance and business potential (Berger,
Klapper, and Udell 2001). Past research has shown the importance of developing
relationships with banks for small business. Petersen and Rajan (1994) found that a
relationship with an institutional lender increases the availability of financing to a small
business. Berger and Udell (1995) found that lenders offered lower rates to firms with
longer relationships and were less likely to require collateral.
There are generally two primary methods of bank lending. The first is transaction
lending, which is used mostly by private commercial banks and relies mainly on
quantitative data to screen loan applications. These data include information on
financial status, collateral, credit history, etc. The other approach is relationship
lending, which relies mostly on qualitative data collected on clients over the period of
1
“Adequate financial access” is defined as the ability to gain access to external funding as needed at a
reasonable price.
2
The term “downscaling” in this paper refers to banks that have traditionally served larger clients but now
make loans to microenterprises.
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their relationship with loan officers. This lending approach is used for clients who may
not have adequate quantitative information, such as credit history or financial
statements, to be approved for loans (Berger and Udell 2004). The main drawback of
this lending approach is that knowledge and information about customers are more
difficult to transfer than those in transaction lending.
Lenders who lend to small borrowers tend to use the relationship lending approach.
This is typical in microfinance institutions (MFIs), which play a primary role in the
microfinance industry. Microfinance provides access to finance for poorer households
and small businesses lacking opportunities to obtain financial services from traditional
banks, and the transaction size is small. MFIs generally use relationship lending to
alleviate problems of asymmetric information between bank lenders and borrowers,
which gives rise to credit rationing and higher interest rates for small businesses. In
this case, interest rates often cannot be used as a screening mechanism for selecting
creditworthy borrowers because information asymmetries leave lenders vulnerable to
adverse selection and moral hazard problems (Stiglitz and Weiss 1981). Good
borrowers may not be able to obtain credit from banks because the costs of evaluating
the creditworthiness of a small business are typically high compared with the risk-
adjusted return to the lender.
Microfinance used to be the exclusive preserve of nongovernment organizations,
cooperatives, and MFIs while commercial banks were new players in microfinance
(Baydas, Graham, and Valenzuela 1998). Given the success of microfinance around
the world, a large number of commercial banks have made a profitable business out of
this sector. With rising competition in the traditional bank business and growing
pressure from some governments, commercial banks have become interested in
microfinance. Some could make profits lending to small businesses and micro clients,
but some could not. The main factors for failure are often the lack of adequate
understanding of the microfinance market as well as high operating costs. Some
banks, however, have managed to find profitable business opportunities by
downscaling to this new market, achieving both social and financial objectives.
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This setup overcomes some of the main obstacles of the internal unit model as it
is able to have separate staff, management, and governance structure, enabling
autonomy of microfinance operations. The bank will also assume less risk, as the risk
is shared with other shareholders who may be able to bring in more microfinance
experience. Reputation risk is also mitigated as the operations of the bank and
its microfinance subsidiary are separated. However, the drawback is that the new
institution will have less access to bank infrastructure and may end up with duplicate
accounting, human resources, and information technology (IT) systems.
The advantage of this model is that a service company, unlike an SFI, does not require
a separate banking license. Moreover, setting up a service company does not require
much initial capital and is less expensive to establish than an SFI.
It also addresses some of the drawbacks of the internal model because it has its
own structure, management, governance, and staff who give priority to microfinance
operations. At the same time, the service company can utilize the parent bank’s
infrastructure and services to operate more effectively rather than setting up an entirely
new institution.
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party. The loan agreement may come with conditions for the MFI to provide periodic
financial statements, allow for bank inspection, etc. In this model, the bank should
select an MFI that is ready to receive commercial funding. Criteria may include
availability of financial statements, a good management team and governance, a
quality loan portfolio with adequate loan loss policies, transparent and timely relevant
reports, and MFI business prospects. Several banks choose this model of partnering
with MFIs due to its simplicity, compared with the outsourcing model.
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operational scope and make more loans, which resulted in significant deterioration in
its financial position. However, because of its importance to rural Mongolians, it was
granted a period of operation, rather than being closed down. The bank later
recognized and used its wide branch network to reach out to the massive rural market.
As a result, it went from a nearly failed bank to a very successful privatized state bank,
highlighting the hidden potential of the microfinance segment to turn around even the
most troubled bank.
Apart from its extensive branch network, key to the bank’s achievement is its strategy
to launch new products and rapidly deliver them across the country, leveraging the
bank’s branch outreach to achieve economies of scale. These products were tailored to
suit clients’ needs. An example of a successful product is the herder loan, which was
designed to match Mongolian herders’ irregular stream of income (Gutin and Young
2005). As herders only have income during certain periods, the product is short term in
nature (usually lasting no more than 1 year) and helps cover expenses during times
when herders have no cash or need to buy herd-related products.
Today, Khan Bank is the main rural financial services provider in the country, offering
deposit and loan products to individuals, SMEs, and corporate customers throughout
its network of 535 branches, and was Mongolia’s largest retail bank at the end of
2014. In the extraordinarily challenging year of 2014, which saw a significant drop in
foreign direct investment, an increase in the foreign trade deficit, high inflation, and
currency depreciation, Khan Bank continued to perform well and maintained its market
leadership position. Net profit after tax in 2014 increased 12.0% and return on equity
registered at 28.3%. The bank is one of the best-performing banks in the country and
has received many awards, including Best Bank in Mongolia by Euromoney.
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guarantee. The overdraft is drawn only in the case of default, and the MFI is obliged to
pay a penal rate of interest on the amount that it draws from the overdraft facility
(Ananth 2005).
A particular success story is the link between ICICI and Spandana, an MFI in India.
Since the partnership began in 2003, the two organizations have worked very closely
together. Spandana’s operations are primarily concentrated in the state of Andhra
Pradesh and it delivers financial services in 21 of the state’s 23 districts through
216 branches. In each of these 21 districts, there is at least one branch operating
under the ICICI Bank partnership model. The result of this partnership was a
phenomenal increase in Spandana’s borrowers—250% from 2004 to 2005, the largest
jump in history. Spandana’s partnership with ICICI Bank benefits both organizations.
ICICI Bank, through its association with Spandana, is able to reach an underserved
market segment. The partnership benefits Spandana by providing it with steady access
to funds. Spandana’s operating costs are much lower than comparable costs of banks
and nonbank finance companies. The delinquency levels are also much lower, at less
than 1% compared with over 5% for banks and nonbank finance companies.
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with approximately 1.5 million customers. SME loans constitute approximately 32% of
its business banking loans.
In terms of partnership with MFIs, Garanti entered into a relationship with Maya
Enterprise in 2001. While Maya helped local businesses fill out forms and negotiate
deals, Garanti provided branch network banking, access to ATMs, and electronic
banking facilities to Maya’s customers. Garanti benefited from the increased revenue
from the fees while Maya’s costs were reduced and efficiency was increased by taking
advantage of existing bank infrastructure and systems (Isern and Porteous 2005). This
is an example of a successful relationship between a bank and an MFI in Turkey.
The summary of each bank business model and key success factors are summarized
in Table 1.
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It should be understood that the political culture in Thailand strongly supports the
financial needs of the poor, SMEs, the rural population, and farmers. Consequently,
there have been extensive formal government schemes aiming to provide financial
services to these groups. This has been done through large and influential government
3
In Thailand, MFIs include cooperatives, credit unions, village banks, and VRFs. These institutions
deliver financial services including microloans to poorer household and small businesses. MFIs are
normally in the semiformal and informal sectors.
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SFIs and the VRFs. These SFIs, which are subsidized and closely controlled by the
government, are generally considered a policy vehicle to bring economic and social
benefit to villagers through programs such as loan, savings, and insurance programs.
While some SFIs offer the same deposit-taking and loan products as the commercial
banks, they have a greater presence than commercial banks in rural and remote areas.
The village and urban revolving funds penetrate even further into rural areas than
commercial banks and SFIs, bringing microfinance services in the form of loans to
lower-income clients in the remote areas. The latest Bank of Thailand and National
Statistical Office survey revealed that indebted Thai households indeed borrow most
frequently from SFIs (37.8%), followed by village and urban revolving funds (23.6%).
The percentage of households that borrow from VRFs have also increased over the
years, from 19.2% in 2009 to 22.4% in 2011 and 23.6% in 2013 (Table 2). Commercial
banks, meanwhile, provide only 9.3% of credit to indebted Thai households.
For SME financing, the landscape is also characterized by credit and interest rates
subsidized by the government, either directly or indirectly, via the VRF and the SFIs,
particularly the two most prominent SFIs, the Bank of Agriculture and Agricultural
Cooperatives (BAAC) and Government Savings Bank (GSB). SFIs are the biggest
formal players in the Thai microfinance market, and carry out various government
programs in this area. While both BAAC and GSB target low-income groups, BAAC’s
main customer base is farmers while GSB has a larger share of urban customers.
BAAC was established to provide affordable loans to Thai farmers and small
entrepreneurs in rural areas. Its most important feature is its extensive network capable
of reaching low-income people in the rural areas, as well as its large savings
mobilization. In addition to offering microloans directly to low-income customers,
several SFIs, especially BAAC and GSB, also provide loans to semiformal financial
institutions such as village funds and cooperatives at below-market interest rates
(Meagher 2013). These institutions form partnerships with MFIs along the lines
discussed in section 3.2 2.
As discussed earlier, commercial banks are not prominent players when it comes to the
market for microfinance. To be fair, however, following the Financial Sector Master
Plan Phase 1 (2004–2008) and Phase 2 (2010–2014), the banking sector has entered
into the SME segments. In fact, most commercial banks currently have retail banking
operations and have launched many new products tailored for SMEs, resulting in
increased lending to SMEs over the years (Figure 6). Still, the majority of SMEs,
particularly small enterprises, do not have access to bank credit. According to the
survey on debt burden and financial access of Thai SMEs by the Office of Small and
Medium Enterprises Promotion, the major source of funding for large enterprises
(53.3%) and medium enterprises (72.0%) is loans from financial institutions, while only
35.7% of small enterprises’ funding is from bank credit (OSMEP 2012). As a result,
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many small businesses end up using their own funds or borrowing from loan sharks
(or moneylenders), which charge very high interest rates (Fiscal Policy Office 2015).
The government and the Bank of Thailand have initiated a number of rules and
regulations to provide an enabling environment for commercial banks to enter the
microfinance industry. These include, for example, allowing commercial banks to
extend microfinance loans for SMEs not exceeding B200,000 per borrower, allowing
retail banking licenses, and allowing new players for nanofinance for loans not
exceeding B100,000 per borrower.
These microfinance guidelines have not provided enough incentive for banks
to downscale due to high operating costs, with the exception of Krug Thai Bank, a
state-owned commercial bank, and Thai Credit Retail Bank. In terms of outreach,
however, the contribution of retail banks in microfinance has not been significant since
their establishment; only 0.3% of SMEs are reported to frequently use services from
retail banks (OSMEP 2012). Meanwhile, other nonbank institutions such as personal
loan companies, which play an important role in retail lending, are allowed to provide
loans only for consumption purposes at an interest rate not exceeding 28%, including
all fees, and cannot provide business loans (Fiscal Policy Office 2015).
In the past, one of the efforts to involve private banks in microfinance was the
establishment of retail banks with features similar to SFIs (discussed in section 3.1.2)
to act as a niche player in microenterprise and SME financing. A retail bank is basically
a limited-charter commercial bank focusing on retail and SME finance, and may
not operate in high-risk areas such as forex and derivatives. In 2005, the Ministry of
Finance approved four retail bank licenses under policies adopted in the Financial
Sector Master Plan, but only one (Thai Credit Retail Bank) remains open for business
today. Although Thai Credit Retail Bank aims to serve small businesses and customers
whose loan sizes are too small to qualify for loans with other commercial banks,
its average loan size is still around B400,000 (approx. $11,428), above the B200,000
threshold used by the Bank of Thailand as the definition of microcredit.
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Another active player is Krug Thai Bank, which is a state-owned commercial bank.
Apart from its own microfinance initiative via the Community Bank project, Krug Thai
Bank’s main involvement in microfinance is the government-affiliated activity. Through
its link with the government, the bank provides financial services to village and
urban revolving funds and serves as a financing channel for well-performing funds to
finance their expansion, using a financing approach similar to the one discussed in
section 3.2.2. The loans are wholesaled to these funds, which in turn provide loans to
their members for income-generating purposes.
As of the second quarter of 2015, SME loans account for 38.5% of commercial banks’
outstanding loans, most of them geared toward medium-sized enterprises (Bank
of Thailand 2015). The ratio of nonperforming loans for SMEs is also reported to
be relatively high at 3.44%, compared with overall banking nonperforming loans of
2.38% (Figure 7), and is much higher than that of large customers (1.19%). Although
commercial banks are the main provider of credit in Thailand, they have no real
interest in servicing small customers, given the much greater volume and profits
to be found in the business sector, foreign exchange services, and high-income and
middle-class customers.
In fact, despite official efforts to bring more people and businesses into the financial
system, it appears that the overall situation of financial access in Thailand has not
improved. According to a 2013 survey by the National Statistical Office and the Bank of
Thailand, while 80.7% of households surveyed use deposit services from financial
institutions, only 39.5% reported taking out loans from the financial system (Bank of
Thailand 2013a and Figure 8). This means that as much as 60.5% of households in
2013 do not use credit services from financial institutions, higher than the 33.9%
recorded in 2006. The majority of those who do not use credit services are self-
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excluded. The main reasons are no credit need and preferences for credit from SFIs
and VRFs. Households without access to formal and semiformal sectors account for
around 10% of the total. The main reasons for having no access include inadequate
financial status and lack of collateral, fear of rejection, and complicated loan
procedures (Bank of Thailand 2013a). The breakdown also finds that only around
27.8% of households reported actually taking out loans from formal financial institutions
in 2013, compared with 43.3% in 2006.
4.3.1 Nanofinance
The nanofinance scheme is a recent effort by the government to address the problem
of loan sharks (or moneylenders) faced by SMEs that do not have access to formal
lenders. About 600,000 households in Thailand are reported to borrow from the
informal sector, while 1.3 million households cannot gain access to formal credit (Bank
of Thailand 2013a). In early 2015, the government together with the Bank of Thailand
launched a nanofinance scheme to help start-up firms gain access to credit. Operators
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with registered capital of at least B50 million are eligible to become nanofinancial
institutions under the Bank of Thailand’s criteria, and their debt-to-equity ratio may not
exceed seven times their registered capital. Interest rates for nanofinancing are capped
at 3% per month, or 36% a year, with the principal not exceeding B100,000 for
each borrower. One important feature of nanofinance is that there is no collateral or
statement of income required for borrowing (Fiscal Policy Office 2015). Commercial
banks and registered institutions can operate the nanofinance scheme immediately
without seeking permission from the finance minister, but nonbank lenders must apply
and obtain the minister's approval. Currently, nine companies have won licenses to
become nanofinance lenders and five companies have started operations.
Although it may be too early to evaluate the success of the nanofinance scheme,
progress in terms of lending to SMEs has been slow. The first nanofinance
companies started operations in May 2015, and by November 2015 the portfolio of
outstanding loans was reported to be only B59 million (approx. $1.69 million) for
3,141 borrowers, much less than the government expected. New operators have been
cautious in lending to these high-risk borrowers with no collateral. It is reported that
nanofinance companies are choosing to lend primarily to existing customers, rather
than to new customers or start-up entrepreneurs, due to concern over the quality of
new borrowers. Operating costs in processing a new loan application are high relative
to the size of the loan. If default occurs, the costs to recover the loan are also
considered too high for companies to bear. Meanwhile, one company that chooses
to extend loans mostly to new customers has a nonperforming loan ratio of 16%,
much higher than expected. Therefore, with the current average loan size of less than
B20,000 (approx. $571) and possible risk of default, nanofinance companies view the
36% interest rate cap by the government as too low to cover operating expenses.
Nanofinance companies consider this interest rate low, especially when compared with
underground lenders or loan sharks, which normally charge interest rates of 15%–20%
per month, or almost 200% or more per year.
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loan, typically limited to B20,000 without collateral. As of September 2013, there were
79,255 funds, including 74,989 village, 3,528 urban, and 738 military community funds.
These funds currently have as many as 11.7 million members and have lent a total of
about B546.5 billion (approx. $15.6 billion) to 10.3 million active borrowers across the
country (Vichientplert 2015). Village funds have the potential to transform themselves
into village banks if they get good and capable executives, adhere to
their founding principles, and have mechanisms to ensure villagers truly understand
the purpose of such funds. With the VRF scheme, villagers have convenient access
to funding that comes with a very low interest rate and therefore have a better chance
of seeing their start-ups take off. The scheme, however, has its drawbacks. Private
providers are unable to compete with the VRFs on cost. Regulations and licensing
requirements in Thailand are so strict that nongovernment organizations have
stopped setting up microfinance business. In the environment of widespread
government-subsidized microfinance programs, there are very few private-driven MFIs
with legal status in Thailand. This is in stark contrast to many middle-income countries
where private sector organizations have taken the initiative to be the main providers
of microfinance.
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in the real estate business, intellectual property, and other assets as provided in the
ministerial regulation (Ministry of Commerce 2015). The law has been announced in
the Royal Gazette and will be effective in July 2016.
5.1 Recommendation 1
Facilitate partnerships between commercial banks and MFIs and phase out
government support schemes: To a large extent, the very existence of state support
of SMEs and microlenders is owed to the inability or unwillingness of banks to serve
small customers. But banks have enormous potential for making financial systems truly
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inclusive. Commercial banks in Thailand have wide branch networks, the ability to offer
a range of services, and the funds to invest in systems and technical skills. Commercial
banks can use these strengths to reach massive numbers of small clients, both on their
own and in partnership with other MFIs such as VRFs, cooperatives, and various
savings groups in the country. Currently, there are as many as 148,000 semiformal and
informal MFIs in Thailand (Lewis et al. 2013), representing a vast market opportunity
for business partnerships. 4
To enable commercial banks to compete with SFIs on cost, the Thai government
should gradually phase out SME financial assistance via existing SFIs and allow a
competitive level playing field for commercial banks. SFIs in Thailand such as the Bank
of Agriculture and Agricultural Cooperatives and Government Savings Bank already
have a large number of savers and extensive branch infrastructure as well as links
with semiformal financial institutions such as village and urban revolving funds and
cooperatives (Meagher 2013). In addition, SFIs enjoy preferential treatment in terms of
tax and regulatory requirements. The government should allow these SFIs to compete
or partner with commercial banks based on market mechanisms without subsidized
credit. It is also necessary to phase out microfinance support schemes through other
institutions such as cooperatives and village funds.
A bank entering the microfinance market may start with the lowest level of
engagement, providing infrastructure to MFIs for a fee. By providing services to MFIs
such as cashier services, an ATM network, or office rental in return for fees or rents,
banks have an opportunity to learn more about small clients and their transaction
patterns. This learning process should enable banks to progress as appropriate toward
the highest levels of engagement in the microfinance business, where they outsource
retail operations or set up their own subsidiaries (Figure 9).
4
These estimates include cooperatives and occupational groups (13,000), savings groups for production
(24,000), village funds (80,000), and self-help and community financial organizations (28,000).
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5.2 Recommendation 2
Liberalize interest rate requirements for microfinance: The Bank of Thailand has
set a 28% cap, inclusive of all fees, for lending from nonbank financial institutions as
well as microcredit loans from commercial banks. Recently, even though the Bank of
Thailand has allowed the new nanofinance license, regulations require the new
operators to charge interest of no more than 36%. However, this interest rate may be
too low for nanofinance companies to break even, as reflected by a very low loan
disbursement rate since its inception. As the average size of nanoloans has so far
been smaller than the maximum allowable limit (around less than B20,000),
nanofinance companies view high unit cost as an important obstacle. Therefore, the
interest rate cap should be either lifted for microfinance loans or allowed more flexibility
in terms of the interest rate charged. Rather than imposing a flat-rate ceiling, the
interest rate should be allowed to vary according to loan size, giving nanofinance
companies some room to cover costs. It is reported that microfinance interest rates in
other countries vary from 27% to 75% per year (Fiscal Policy Office 2015).
5.3 Recommendation 3
Develop SME and MFI credit information systems: Information is key to reducing
transaction costs in SME lending and monitoring. Whether banks choose to lend
directly to SMEs or partner with existing MFIs, there is the need to build an SME
lending database and centralized information on MFIs. A credit rating scheme for
SMEs could be developed and implemented using data on lending by banks to SMEs.
From the lender’s point of view, it is costly to examine the financial health of each SME.
This cost is passed on to SMEs, thereby increasing their borrowing costs. Centralized
information on MFIs, including credit ratings, should also reduce information costs for
banks looking for viable MFIs as business partners. 5 Formal documentation and
operating procedures of MFIs should be established to facilitate matchmaking between
banks and MFIs. For this, it may be necessary for the government to establish formal
and legal procedures for MFIs, while ensuring that these do not impede MFIs’ existing
flexibility in lending to local clients.
To conclude, the Thai government has recognized the importance of SMEs to the
economy and has provided a substantial amount of support to this sector. It has been
more than 10 years since the start of the Financial Sector Master Plan, which aimed to
provide an enabling environment for more financial access in Thailand. Still, SMEs
have not been able to catch up with larger enterprises. SME contribution to GDP has
been declining, with its share in 2015 (39.6% of GDP) still lower than what it was
20 years ago (44.2%), and the constraints to SME financing remain the main topic of
policy discussion today. The real issue, therefore, may not be about the lack of
financing and support per se but about how to design appropriate business models
and market-friendly supporting schemes to help SMEs gain access to credit on a
sustainable basis. For this, it should no longer be assumed that the private sector is
not willing to provide financial services to SMEs at a reasonable price, and that
government support is needed as a result. The private sector should, for their part,
become more involved in SME financing as an alternative to public financial
assistance. To facilitate this process, the government should explore the possibility
of providing the necessary infrastructure and incentives to encourage commercial
banks to become more active players in the microfinance market, either by expanding
5
Currently, the National Credit Bureau of Thailand, established in 2005 as a result of a merger between
two existing credit reporting agencies at the time, collects personal information on the loan and credit
card products from formal financial institutions but does not have credit information from MFIs.
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