BANGKOK (REUTERS) - Thailand is hoping that crowdfunding could provide an alternative for small companies struggling to fund growth as banks cut back on lending.
Thai banks have tightened lending criteria as the economy falls short of government growth targets and the number of small- and medium-sized enterprises defaulting on loans rises.
The Securities and Exchange Commission expects to authorise the first Internet portal, that would match firms seeking funding with small equity investors, by the end of the year, Sarica Apiwatthakakul, director of intermediary licensing and SME financing department, said in a written response to questions on Friday.
The SEC had received interest in operating the portal from more than 10 companies, she said. If the equity portals are a success, the SEC may develop crowdfunding for bonds, she added.
Information technology, food and health companies too small for stock market listings are among those interested in using portals to raise funds, said Aekkasit Diewwanit, chief executive of Thai crowdfunding portal Dreammaker.
Mr Aekkasit said at least 10 entrepreneurs in food, healthcare and information technology were ready to pitch business plans through Dreammaker, which plans to apply to run an equity crowdfunding portal. "The crowdfunding platform will help build channels for inclusive economic growth for every level of company," he said.
Companies could raise up to 20 million baht per year from retail investors, to a maximum of 40 million baht, Mr Sarica said.
Individual investors would be limited to 50,000 baht investment per issuer, and a maximum of 500,000 baht per year.
There are no limits on fund investments through the portal, Mr Sarica said.
If crowdfunding can help innovative start-ups, it could help make Southeast Asia's second-largest economy more competitive, said Vorapol Socatiyanurak, a member of the National Legislative Assembly and chairman of a finance, banking, financial institutions and capital markets sub-committee.
Thailand's exports have been in long-term decline, partly because of a dependency on products that are becoming obsolete. Innovation was needed to revive the export sector, Vorapol said. "Thailand needs a start-up generation to help improve the competitiveness," said Vorapol, a former head of the SEC. "We need to be more innovative and develop our own brands. Global demand is changing."