Small and Medium Enterprise Development Bank of Thailand (SME D Bank) plans to focus on investments in promising bio-, circular and green (BCG) SMEs and startups this year, according to president Nartnaree Rathapat.
The move is in line with the government's policy to have state banks provide financial support to SMEs, considered one of the country's economic pillars.
The bank set up two private equity trust funds, one worth 1.42 billion baht and the other 602 million baht, to invest in SMEs and startups.
SME D Bank expects to invest the 2 billion baht by 2025, with 400 million baht slated for spending this year. Of the 400 million baht, at least 100 million will be invested in BCG businesses, Ms Nartnaree said.
According to the investment plan, the two trust funds will invest 600 million baht in strong SMEs and sell shares back to the companies once they successfully list on either the Stock Exchange of Thailand (SET) or the Market for Alternative Investment (MAI).
The funds plan to invest another 1.2 billion baht in SMEs with growth potential, selling shares back to them when they list on LiVE Exchange, a bourse for SMEs and startups.
The funds are to spend the remaining 200 million baht on startups or social enterprises, offering shares to other investors when they list on LiVE Exchange, according to the plan.
"We want to work closely with the business operators and grow together," she said.
SME D Bank plans to invest in companies that are ready for joint investment, have clear business directions, and are keen to raise funds in the local bourses, said Ms Nartnaree.
The bank will invest up to 30-50 million baht per SME and acquire stakes of up to 49%, according to the plan. The investment period is 3-7 years.
As of 2022, the bank had approved investment from the two funds of more than 900 million baht in 32 companies, out of 101 firms pitching for funding.
During 2021-2022, the funds played a key role in pushing four SMEs to list on capital markets, with a joint investment totalling 200 million baht.
Delta Paint launched its initial public offering (IPO) on the MAI with 230 million shares at a price of 7.50 baht per share, while Nova Empire launched its IPO of 600 million shares on the SET at a price of 6.90 baht per share.
Storage Asia launched its IPO of 256 million shares on LiVE Exchange at a price of 1.40 baht per share, while KT Medical Service launched its IPO on the MAI with 300 million shares at a price of 3.10 baht per share.
In 2022, micro, small and medium-sized enterprises (MSMEs) employed 12.6 million people, representing 71.8% of Thailand's total employment.
Last year the number of MSMEs stood at 3.21 million, representing 99.6% of total business operators in Thailand.
In 2022, SME D Bank extended loans worth 68 billion baht, its highest level since its establishment 21 years ago. The amount beat its target by 2.8 billion baht.
The bank's outstanding loans tallied 109 billion baht as of last year.
SME D Bank extended more than 160 billion baht to SMEs over the past three years when Thailand was in the grips of the pandemic.
The lending during that period is estimated to have helped retain 629,000 jobs and generated cash flow of 735 billion baht, according to the bank.