Project description

Title: Promotion of Financial Services
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) (Federal Ministry for Economic Cooperation and Development)
Country: Thailand
Partner: Bank for Agriculture and Agricultural Cooperatives (BAAC)
Overall term: January 2005 to December 2006

Context

The Promotion of Financial Services (PFS) project will influence SME competitiveness by improving the market for financial services. The overall Thai-German programme divides services into two categories. The first is public benefit services provided by the Royal Thai Government or business organisations. These services include national, regional or sectoral competitiveness strategies, improved policies, laws, regulations, and information. The second category is private benefit services, delivered either as stand-alone services such as accounting, financial services, certification and testing, or as services embedded within SME business transactions in sub-sector based value chains. These services include providing knowledge, information and advice, which are invaluable in enhancing SME competitiveness.

Objective

The core of the project is to support the development of the financial services market, specifically SMEs’ financial services requirements and the financial service products supplied by service providers, so as to deliver cost-effective and demand-oriented financial services to SMEs in selected sub-sectors. Financial service providers include SME Bank, BAAC, GSB (Government Savings Bank) and other financial institutions, industry associations as well as ancillary finance-related service providers.

Approach

The project will achieve this by:

• designing and implementing at least six financial service interventions for SMEs in the selected sub-sectors
• developing the operational and managerial capacity of SME Bank, BAAC, GSB, other financial institutions, industry associations and financial service providers’ personnel to expand, enhance, design, promote and deliver cost-effective and demand-oriented financial services to SMEs in the selected sub-sectors
• facilitating the entry of complimentary finance-related service providers into the market for financial services to SMEs in the selected sub-sectors.

The project will monitor results both at the level of the enterprise and at the level of the service market. At the enterprise level, it will assess (through surveys) the impact of the advisory services on any or all of the programme’s overall competitiveness indicators – enterprise performance, productivity, innovation and environmental sustainability. At the service market level, it will record cost recovery data (formula to be agreed upon) for services delivered or facilitated, together with the number of new services introduced to the selected sub-sectors. Improvements in the quality of services delivered (as determined by customer satisfaction rates) and an increase in demand (requests for information or assistance) from the target group will also be registered.

This project is part of the

• Thai-German Programme for Enterprise Competitiveness: Business and Financial Services Component