financial literacy and smes - oecd · owner of a small som-tum (thai spicy salad) shop now...

© 2012 Kenan Institute Asia

Financial Literacy and

SMEs

Mr.Wichai Limpitikranon

Manager,

Business & Economic Development Program,

Kenan Institute Asia

([email protected])

Cebu, Phillippines, 12 Sep 2012

OECD-


Overview

1. Overview of Thai SMEs.

2. New Entrepreneurs Creation(NEC)

3. Citi Foundation’s grants in Thailand

2


Type

Small Medium

No. of

Employees

Fixed Assets

excluding. Land

(THB mil)

No. of

Employees

Fixed Assets

excluding. Land

(THB mil)

Manufacturing 50 or less 50 or less 51-200 >50 to 200

Services 50 or less 50 or less 51-200 >50 to 200

Wholesale 25 or less 50 or less 26-50 >50 to 100

Retail 15 or less 30 or less 16-30 >30 to 60

3

Definition of SMEs

1. Manufacturing Business including industrial production, mining,

agriculture production particularly agricultural processing.

2. Trading Businesses: wholesale, retail, import, and export.

3. Service Businesses: businesses supporting manufacturing, trading,

Hotels and Tourist related industries, repair, transport and beauty

salons, etc.

Source: Office of SMEs Promotion (OSMEP), 1 US$ = 31.076 Baht(10 Sep 12)


4

Structure of Thai SMEs, 2010

Source : OSMEP, White paper on SMEs,

2010

3,746,967

37.1 %

2,894,780

99.6 %

30,132

0.4 %

10,507,507

77.86%

2,988,666

22.14 %

1,753,804

28.39 %

6,356,019

62.9 % 4,422,620

71.61 %


• Demand for Loans

• Access to Loans.

• Formal Loans

• Neither a guarantor nor collateral.

• Could not provide the formal loan sources with needed documents.

• Informal Loans

• High interest rates.

• Inability to repay the loan.

5

Loan problems for SMEs


• Donor : Department of Industrial Promotion, Ministry of Industry

• Objectives

• Creating new entrepreneurs throughout the country.

• Ensuring that participants have the knowledge and capability to drive

entrepreneurship in the future.

• 10-day training courses

• Marketing strategy

• Financial and accounting management

• Business planning

• One-on-one consultation on their business plans

• A study trip to a successful SME.

• 110 participants per year.

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2.New Entrepreneuers Creation


Financial Capability and Asset Building

28%

Youth Education and Livelihoods

26%

Enterprise Development

28%

Microfinance18%

Key areas of focus

7

At-Risk Women

Financial Literacy

and School Banks

Citi Scholarship &

Youth Development

Camp

SMEs capacity Building

& Triple Bottom Line

Small Hotels

Don Rae Community

Saving Group

1

3.Citi Foundation’s grants in Thailand (2009 – 2010)

© 2012 Kenan Institute Asia 8

Target Group

1) Having a monthly income below US $250 per

month (8,500 THB)

2) Serving in a high-risk, short-duration occupation

3) Have not attended university

Problem

• At-risk women have a difficult time budgeting and

saving money due to a lack of financial knowledge

• They fall victim to the informal lending sector

(predatory lending) and end up in a cycle of debt

and abuse


Solution

9

Indentify, recruit and teach at-risk

women:

The benefits of financial planning

Management of Spending

Management of Savings

Management of Earnings

Management of Investment

Methodology: interactive teaching, games, role playing, group

activities, real life lessons targeted to the women, and use of Citi

employee volunteers.


At-Risk Women Project

Donor: Citi Foundation

Partners: Duang Prateep Foundation

The Social Service and Community Development Centre

Klong Toey

Night clubs in Soi Cowboy

Ministry of Social Development and Human Security’s

Bureau of Women and Child Welfare Protection

The Department of Skill Development, Ministry of Labour

Women Correctional Institution for Drug Addicts,

Department of Corrections, Ministry of Justice

Implementer: Kenan Institute Asia10


Results (after three years)

1,027 women trained

Successful behavior change of program

beneficiaries

31 Citi volunteers participated in the

program

Training material highly refined

Expanded to include government as

recruitment partner and to teach vocational

skills

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At-Risk Women Project

Phase I Phase II Phase III

Aug 08 Aug 09 Oct 10 Oct 11U$ 44,000 U$ 45,000 U$ 45,000

Expected Result of retaining saving behavior: 3 M ≥ 65%

Phase I - II 6 M ≥ 50%

1 Y ≥ 45%

188 Slum Women 34 Nightlife Women 274 Vocational Women

1

Phase IV

U$ 61,000

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Success Story

Ms. Anon Rattanachai

Owner of a small Som-Tum (Thai spicy salad) shop

Now effectively manages her finances Household accounting, allocating money into envelops for various purposes including her business, her daughter’s debt and utilities.

Now has an emergency incident fund and savings for a future house and quail farm (8 year goal).

13


Partner engagement

Citi Foundation

K.I.Asia

Government

- Ministry of Social Development and Human Security (MSDHS)

- Women Correctional Institution for Drug Addicts, Department of Corrections, Ministry of Justice

At-Risk

Women

Project

Supports the economic empowerment

and financial inclusion of low- to

moderate-income people in

communities where Citi operates.

Provider of services for

sustainable

development in Asia in

education, Business

and Economic

Development, public

heath, and

environment.

- Expert on Financial

literacy curriculum

- Connection/Relatio

nship with

government

- Reliability

- Target on low- to

moderate-income

MSDHS:

Promote social developm

ent and create public

equity and social justice.

Its operation aim to

encourage and develop

quality of life, social

security, family and

communication.

Institutes as well as other

concerned functions as

prescribed by the laws.

Women Correctional Institution:

- Provide vocational training to develop their skillsets, and be

better prepared to start their new careers after they are free.

- Rehabilitating prisoners with efficiency


Kenan Institute Asia Queen Sirikit National Convention Center

2nd Floor, Zone D, Room 201/2 60 New Ratchadapisek Road, Klongtoey Bangkok 10110

Tel. +662-229-3131

Fax +662-229-3130 www.kiasia.org

15

Thank you

http://www.kiasia.org/

financial literacy and smes - oecd · owner of a small som-tum (thai spicy salad) shop now...

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