To help increase access to finance for small businesses in Thailand, especially women-owned or led firms, International Finance Corporation (IFC) is providing an equity investment of up to $23.8 million as a cornerstone investor in an initial public offering (IPO) of Thai Credit Bank Public Company Limited (Thai Credit).

IFC said in a statement on last Friday that the first equity investment in a Thai bank will help Thai Credit—the only commercial bank in the country to dedicate financial services to the micro, small, and medium enterprise (MSME) segment—to expand its MSME portfolio and develop new products for this segment, especially women-owned or led MSMEs (WMSME).

It is noted that MSMEs make up 99.6 percent of all registered businesses in Thailand, accounting for 86 percent of total employment and 45 percent of gross domestic production (GDP).

Yet, as of 2021, they faced a financing gap of about $41 billion.

For WMSMEs in Thailand, access to finance is an even bigger challenge, with women entrepreneurs frequently mentioning the lack of collateral (such as land, property, security papers, or deposits in the borrower’s name) as a major barrier, followed by unattractive business plans, high interest rates, and a lack of knowledge about loan application processes.

“Given the underserved market conditions, we welcome IFC’s funding and expect it to support communities, enabling us to offer affordable formal financing to MSMEs, particularly WMSMEs, who have been historically overlooked. IFC has been a great partner in promoting financial inclusion, differentiating Thai Credit from other market participants,” said Roy Agustinus Gunara, Managing Director of Thai Credit.

Additionally, the project will help Thai Credit offer non-financial services (such as training in financing or networking) that are tailored towards WMSMEs’ needs.

“Dedicated financing for MSMEs, including WMSMEs, is critical for an inclusive and sustainable economy,

“Accordingly, IFC’s participation as a cornerstone investor in the IPO will help foster investor confidence while empowering women, promoting SME growth, and catalyzing job creation,” said Jane Yuan Xu, Country Manager for Thailand and Myanmar at IFC.

For the past two decades, IFC has been at the forefront of promoting greater financial inclusion in Thailand by working with key partners in the financial sector.

In July 2023, IFC provided $105 million loan to Thai Credit to support MSMEs in Thailand, with at least 50 percent of the funding earmarked for WMSMEs.

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.

The organization works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the Impacts of global compounding crises.

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