To enhance access to financing for small businesses in Thailand, particularly those owned or led by women, the International Finance Corporation (IFC) is investing up to $23.8 million as a cornerstone investor in the initial public offering (IPO) of Thai Credit Bank Public Company Limited (Thai Credit).
IFC’s equity investment in Thai Credit, the only commercial bank in Thailand focused on providing financial services to micro, small, and medium-sized enterprises (MSMEs), aims to support the expansion of its MSME portfolio and the development of new products, particularly for women-owned or led MSMEs (WMSMEs).
In Thailand, MSMEs represent 99.6 percent of all registered businesses, contributing significantly to employment and GDP. However, as of 2021, they encountered a financing gap of approximately $41 billion. Access to finance remains a significant challenge for WMSMEs, with issues such as lack of collateral, unattractive business plans, high interest rates, and limited knowledge about loan application processes cited as major barriers by women entrepreneurs.
“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.
The project will also enable Thai Credit to offer non-financial services tailored to the needs of WMSMEs. Jane Yuan Xu, Country Manager for Thailand and Myanmar at IFC said, “,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,”
IFC’s involvement as a major investor in the IPO is likely to boost confidence among investors. At the same time, it’s going to help women, support small businesses, and create more jobs.
IFC has been actively promoting financial inclusion in Thailand for over two decades, collaborating with key partners in the financial sector. In July 2023, IFC provided a $105 million loan to Thai Credit to support MSMEs, with a significant portion earmarked for WMSMEs.
As a member of the World Bank Group, IFC is committed to leveraging 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, aiming to end extreme poverty and boost shared prosperity amidst global crises.