Commercial Bank Innovations in Small and Medium-Sized Enterprise Finance: Global Models and Implications for Thailand

Tientip Subhanij
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Tientip Subhanij: Asian Development Bank Institute

No 583, ADBI Working Papers from Asian Development Bank Institute

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.

Keywords: SME; Thailand; bank; financing; microfinance; loans; credit; MFI; SFI; financial institution; commercial banking; financial access (search for similar items in EconPapers)
JEL-codes: E50 G21 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-09-12
New Economics Papers: this item is included in nep-ban, nep-ent, nep-mfd, nep-sbm, nep-sea and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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