B2bn GSB fund set for SMEs

The 2-billion-baht venture capital fund led by Government Savings Bank (GSB) is expected to fully invest in small and medium-sized enterprises (SMEs) over the next year or two, says president and chief executive Chatchai Payuhanaveechai.

GSB signed an agreement with the Stock Exchange of Thailand (SET) yesterday to set up SME Private Equity Trust Fund to invest in SMEs with high growth potential. The first fund under its umbrella will have a value of 500 million baht, of which 100 million will be funded by the SET.

The fund targets start-ups with high growth potential; those whose business supports the country’s economic growth; SME suppliers to the public sector, large corporations or members of the Thai Chamber of Commerce; and SME social enterprises.

The venture capital fund is part of the government’s stimulus to pump fresh funds into the SME sector. Similarly, two other state-owned banks — Krungthai Bank and the Small and Medium Enterprise Development Bank of Thailand — will set up their own venture capital funds worth 2 billion baht each, and the government will contribute another 2 billion to each.

The GSB-led fund will be able to put up to 10 million baht into each start-up and a maximum of 50 million for each SME operator.

The fund with a maturity of 10 years can have a maximum shareholding in each SME of 49%, and it can exit when firms list on the SET or make a profit and want to buy their shares back.

Mr Chatchai said the fund’s investment in SMEs was expected to pay off in six to 10 years.

The fund will have professional managers and plans to send representatives to seats on the SMEs’ boards on a pro rata basis to provide advice about management, marketing and finance.

SET president Kesara Manchusree said SMEs played a crucial role in the Thai economy and those receiving venture capital funding will be urged to list on the Market for Alternative Investment when ready.