PRIVATE EQUITY | Tony Chua, Thailand

Siam Commercial assists SMEs in locating funds

Private equity funds' search for SMEs and latter's financing needs prompts SCB to act as middleman.

Siam Commercial Bank is offering a matchmaking service to allow small and medium-sized enterprises (SMEs) easier access to loans, says senior executive vice-president Sirichai Sombutsiri.

Many private equity funds in Thailand are searching for business ventures with SMEs while the enterprises often find loan conditions tight.

Bank financial support to businesses would be in line with the equity fund's capability to repay debt, lowering the risk for banks and making them more likely to approve loans.

SCB plays the middleman matching demand and supply in the market and providing financial support. Of course, with every venture there is risk, and the terms of stakeholding, time period and management may differ for each SME operator and fund, he said.

Typically SME operators will own a majority stake of at least 51% in a company, and set a shareholding period for a fund of at least five years. The equity fund participates in management, marketing, and business know-how depending on negotiations.

View the full report in Bangkok Post.

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