Ngern Tid Lor achieves IFC’s first financing package granted to Thai non-bank financial institution

Small businesses in Thailand will increasingly access to seek financing from Ngern Tid Lor Public Company Limited (TIDLOR) with IFC’s first financing package granted to non-banking financial institution (NBFI) in Thailand.   The latest financing package from IFC aims to support a resilient recovery by promoting business growth, creating jobs, and fostering financial inclusion.

IFC’s financing package of up to $100 million (about 3,000 million Thai baht) loan will allow TIDLOR to increase its lending to micro, small, and medium enterprises (MSMEs in the country). IFC will also mobilize international investors to help TIDLOR access diversified funding and support the company to improve its credit risk management framework.

MSMEs represent 86 percent of Thailand’s labor force and account for 45 percent of the nation’s gross domestic product (GDP). Yet, even before COVID-19, MSMEs in Thailand had an estimated financing gap of $41 billion, accounting for 10.3 percent of the country’s GDP. With the pandemic, they face several challenges including order cancellation, reduced sales, disrupted supply chains, and shortage of working capital. Also, MSME lending by banks has been tighter due to higher non-performing loan (NPL) ratios.

“In the face of an ongoing crisis, IFC’s investment will allow TIDLOR—an affiliate of Bank of Ayudhya Public Company Limited (BAY)—to strengthen our balance sheet as we execute on our strategy to promote financial inclusion with a digital- and data-driven approach, ” said Piyasak Ukritnukun, Managing Director of Ngern Tid Lor Public Company Limited.

NBFIs that are focused on lending remain small in scale, accounting for less than five percent of the total assets of Thailand’s financial system. This is primarily because NBFIs do not accept deposits, lack diversified funding sources, and target informal workers, individual entrepreneurs, and MSMEs that have no fixed asset collateral and are perceived as high risk.

“In line with IFC’s strategic priorities in Thailand, IFC’s investment will help increase accessible, convenient, and affordable financial services for MSMEs, which is critical to promote employment and sustainable development,” said Jane Yuan Xu, IFC Country Manager for Thailand and Myanmar. “IFC’s support will also inspire confidence among potential international investors while having a catalytic effect on competitors, accelerating economic recovery in Thailand,” Xu added.

IFC combines investment and advisory to foster sustainable economic growth in Thailand’s private sector. As of June 2021, IFC’s committed portfolio in Thailand is $875 million.