Siam Commercial Bank is offering a matchmaking service to allow small and medium-sized enterprises (SMEs) easier access to loans, says senior executive vice-president Sirichai Sombutsiri.
Visitors check out some of the offerings at the SCB SME-FTI Factory Outlet event, which runs until Friday at the Siam Commercial Bank head office in Bangkok. WEERAWONG WONGPREEDEE
Many private equity funds in Thailand are searching for business ventures with SMEs while the enterprises often find loan conditions tight.
Bank financial support to businesses would be in line with the equity fund's capability to repay debt, lowering the risk for banks and making them more likely to approve loans.
SCB plays the middleman matching demand and supply in the market and providing financial support. Of course, with every venture there is risk, and the terms of stakeholding, time period and management may differ for each SME operator and fund, he said.
Typically SME operators will own a majority stake of at least 51% in a company, and set a shareholding period for a fund of at least five years. The equity fund participates in management, marketing, and business know-how depending on negotiations.
Private equity funds have grown steadily in Thailand the past few years, he said. SCB has made two matches and has several deals in the pipeline. Exports and the food business are favourites because of their high growth potential and the capital demand of the sectors. Funds generally aim for a return on equity of more than 20%.
The programme also expands the bank's customer base and allows it to provide other innovative services to support SME business expansion. SCB aims to increase its SME loan portfolio to 300 billion baht in the next three years from 150 billion baht.