According to APO (Asian Productivity Organization) insufficient capital or lack of financial sources is the major obstacle for SMEs and usually entrepreneurs need to utilize personal financial sources to start up their business and to expand the operations, since the internal financial sources are normally insufficient.SMEs have difficulty in growing due to insufficient collateral, high transaction costs and incapability to deal with the complexity of formal financial institutions.
Moreover, SMEs in developing countries generally do not get accepted formal bank loans because of perceived high risk of default, low profitability and incapability to demonstrate required physical collateral. In order to cope with these concerns the Thai government has put together a stimulus package including an increase of the capital of the SME Bank which is a government financial institution.