The Securities and Exchange Commission (SEC) estimates 69 small and medium-sized enterprises (SMEs) and startups are likely to access the equity crowdfunding platform next year, with three pilot projects having reported success.
SEC secretary-general Ruenvadee Suwanmongkol said three SMEs and startups were successful in raising a total of 76 million baht through the crowdfunding platform via the capital market.
There are at least 69 more SMEs and startups expected to raise funds through the platform next year, while many financial advisories are applying for the crowdfunding portal licences with the SEC, said Ms Ruenvadee.
She said the SEC and the Stock Exchange of Thailand are conducting a feasibility study to establish a new SME exchange to support trading between small companies.
The new exchange is a channel that also allows early-stage investors to exit venture capital and angel funds.
The SEC expects to open the new SME exchange for trading in 2021.
Ms Ruenvadee said the SEC amended the crowdfunding rules to make them more convenient and flexible for SMEs, allowing fundraisers to issue fundraising instruments as convertible debentures that grant investors rights as creditors in the early stages.
This status allows them to become business owners by converting their bonds to equities, making it easier for investors to decide whether to invest.
In addition, the SEC plans to terminate the regulation requiring fundraisers to return the funds to investors and close the project if they fail to meet their projected target.
Under the revamped regulation, fundraisers are allowed to raise funds up to 80% of the investment target.
To avoid cancellation of the project, companies must raise funds through bonds or convertible debentures that position investors as project creditors.
The relaxation should allow more projects to succeed in fundraising through the platform, she said.
"Crowdfunding is popular, allowing small businesses to directly access public funding without financial institutions such as banks. This allows firms to save lending costs, while investors have the opportunity to get high returns," said Ms Ruenvadee.
"While this platform will disrupt commercial banks' credit systems in the long term, this is a global direction for fundraising that can't be stopped."
The SEC also plans to launch a campaign next year to educate small businesses on digital applications to help them grow their business and raise funds through the new platform, she said.
The SEC allows four companies to lead public fundraising projects as crowdfunding portals, or financial advisory and intermediary firms: Phoenixict (Sinwattana Crowdfunding Platform), Peer Power Platform, LIVE Fincorp, and Dream Maker Equity Crowdfunding.
The most popular crowdfunding models today are donation and peer-to-peer business lending, said Ms Ruenvadee.