THE POTENTIAL OF SMEs BOND ISSUANCE IN THAILAND

  • สมภพ ศักดิ์พันธ์พนม 0819190306
Keywords: SME financing, SME bond

Abstract

The aim of this research is to examine the potential of SME Bond issuance in Thailand. The comparative accessibility to debt financing for SMEs or SMEs bond issuance in various countries is used to study problems and obstacles. The focus group interview is used to develop guidelines of non-listed Thai SMEs Bond issuance. The respondents are the executives from related parties of bond issuance in Thailand. Our result indicates that SMEs in selected EU countries and those in many developing economics have been funded their capital using debt instrument or SMEs bond. The bond fund-raising problems are the financial management, accounting standard, as well as transparency and performance issues. The obstacles are rules and regulation, information disclosure, the flotation cost and the trust of institution and investors. Moreover, we propose that SMEs bond in Thailand should be issued by the medium-sized enterprise due to its revenue capability comparing to the minimum issue size. Credit scoring method is suggested in order to access company qualification with offering via private placement method. The issuing instruments must be legally supervised by SEC and Thai BMA. It should be straight bond with owner-guaranteed, no conversion and no option features. The issue size is about 120 – 150 million Baht within the range of the respondents’ suggestions. The coupon rate should be between 5% and 7% per year with semiannual payment. The maturity is about 5 years and allow the issuer to redeem its bond.

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Published
2020-06-30