International Finance Corp (IFC), a unit of the World Bank Group, is providing a US$105-million loan to Thai Credit Retail Bank Plc (Thai Credit) to support female entrepreneurs in Thailand.
The loan is meant to support micro-, small, and medium-sized enterprises (MSMEs) in Thailand, with at least 50% earmarked for women-owned or led MSMEs, referred to as women-owned micro, small and medium enterprises (WMSMEs), to support job creation and strengthen economic inclusion in the country.
The funding will also help Thai Credit broaden its non-financial services, such as training on financing or networking which are tailored towards WMSMEs.
With a focus on MSMEs, Thai Credit has emerged as a key player in expanding access to financial services to nano- and micro-entrepreneurs and MSMEs, empowering those who have been overlooked. Through extensive outreach and strategic market presence, Thai Credit has helped bridge the gap among underserved entrepreneurs and provided them access to Thailand's formal banking sector.
The growth engine of Thailand's economy, MSMEs represent 72% of the country's labour force and account for 35% of GDP. Access to finance has been challenging due to insufficient collateral, limited credit records, and perceived high business risk, among other factors.
While MSMEs were hit the worst by the impacts of Covid-19, WMSMEs were disproportionately affected by the lockdowns, said Winyou Chaiyawan, chief executive of Thai Credit.
IFC is also expected to help Thai Credit develop financial products to serve WMSMEs, as well as a social loan framework in line with internationally recognised principles.
"Our partnership with Thai Credit is part of IFC's ongoing efforts to support inclusive growth particularly for MSMEs, which remain a key growth engine for Thailand's economy despite being historically underserved," said Jane Yuan Xu, IFC's country manager for Thailand and Myanmar.
"IFC hopes to help Thai Credit differentiate itself from other players, while creating opportunities for small businesses, especially those owned by women."
In fiscal 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries. This project is part of IFC's systematic approach towards deepening Thailand's social financing market, supporting post-Covid sustainable and inclusive economic recovery, and addressing the financing gap for underserved MSMEs and WMSMEs.