There were 2.9 million SMEs (firms

There were 2.9 million SMEs (firms with less than 200 employees) in Thailand in 2010,
constituting 99.6 % of all enterprises and employed 78 % of the labour force including
agriculture. The economy of Thailand was hit by two major events during the period under
study: political instability and the financial crisis originating in the West. In Studies on SME
and Entrepreneurship: Thailand. Key Issues and Policies (2011), the OECD found that less than
half of the 2.9 million SMEs can access formal finance. This problem was compounded
in Thailand by systemic volatility in financial markets. The Asian financial crisis and the
recent global financial crisis have made it difficult for Thai banks to accept risky loans, not
least because they were often burdened with extremely high non-performing loan rates.
The lesson learned from the Asian crisis in 1997 was that adequate capital alone cannot
encourage bank lending. Banks will only lend when they are comfortable with the level of
credit risk