The Thai Social Enterprise Office (TSEO) plans to create a 1-billion-baht fund to mobilise money from the public to finance operations of social entrepreneurs.
The fund offering will have to be approved by the Finance Ministry and stock exchange regulators, TSEO director Nuttaphong Jaruwannaphong said on the sidelines of a seminar entitled "Developing a Better Policy Context for Social Enterprises in Asia and Europ", hosted by the Asia-Europe Foundation and the British Council in Berlin.
The TSEO is an indepedent body set up in 2011. A social enterprise is a for-profit or non-profit organisation that applies commercial strategies to generate profits in addressing social problems rather than maximising profits to shareholders. Thailand is in a fledgling stage of social enterprise development, with 70 companies registered with the TSEO.
In contrast, social investments are popular, with 70,000 businesses contributing 18.5 billion pounds (876 billion baht) to the economy and employing almost 1 million people.
Mr Nuttaphong said the mutual fund, which could emerge as the country's first-ever fund for social enterprise investment, will allocate 85% of the fund to invest in SET-listed stocks listed on the Dow Jones Sustainability Indices. The remaining 15% is for social businesses registered with the office.
To attract investors, the fund will likely provide a 3% guaranteed return to unit trust holders.
Source of funding for the guaranteed returns could derive from idle lotto prizes worth a combined 7 billion baht at present, said Mr Nuttaphong.
The fund's main target is non-profit foundations, which now put 70 billion baht in low-yielding bank deposit accounts nationwide.
"The mutual fund is among several fund-mobilisation options, but the idea will be the front burner of the office to be proposed to Kittiratt Na- Ranong [deputy prime minister and finance minister]," said Mr Nuttaphong.
Other ideas are to convince the state-owned Government Savings Bank to offer cheap loans to social entreperneurs and crowdfunding or raising funds online to support social investment.
The TSEO targets 200 businesses to be registered with the office by year-end, said Mr Nuttaphong.
Even though all social entrepreneurs in Thailand are small, rapid growth is likely if large companies are increasingly aware of their existence and lend support.
Toyota Motor Thailand will this year establish a subsidiary to engage in social enterprise activities, in line with its Japanese parent's policy.
Mr Nuttaphong has also urged the government to amend its public procurement method by requiring only social enterprises to be eligible to win state contracts. Among the Thai social enterprises are Lemon Farm and the publisher Mor Chao Ban.