Govt urged to make room for crowdfunding

"When the Malaysian government launched its crowdfunding portal, it was adopted in a big way.

"But I doubt that many people have realised that the Thai crowdfunding regulations were already launched back in May," Kwek Hong Sin, president of the association, told The Nation last week.

Since May, 10 portals have applied to the Securities and Exchange Commission to become a registered crowdfunding operator, but more government promotion is needed so that start-ups and SMEs can better recognise and trust this new access to funding, she said.

Rapee Sucharitakul, secretary-general of the SEC, has acknowledged the new channel as another fundraising opportunity for SMEs.

Thai SMEs and start-ups can now raise funds via crowdfunding portals that are usually online and do not involve traditional banking.

Businesses have to invite people to pledge small amounts by uploading their business plan, financial statements and tax returns on the website.

The "crowd" is an institution or individual investor.

Kwek, who is also a founder of Sinwattana Crowdfunding SAAS and Software Platform Provider, one of the 10 portals, said what the industry needs from the government now is more awareness creation and more activities.

The government should provide more platforms where crowdfunding operators, SMEs and investors can meet.

Trust has to be created via more education and showcases of SME success stories involving crowd fundraising.

"Crowdfunding is never competing and it is not meant to compete with joint venture capital," she said.

It supports the government’s efforts to provide more access to SME funding, she said, regarding the government’s Bt6 billion venture capital fund launched in September and its Bt5 billion fund introduced last month to strengthen 100,000 exiting SMEs and support start-ups.

Banks that decide to wait and see before investing in crowdfunding will start losing customers when the industry begins to bloom as it did in many other countries.

Maybank in Malaysia has seen the importance of crowdfunding for SME growth. Krungthai Bank and Kasikornbank are already making moves to support the industry since the regulations were issued six months ago, she added.

Rapee told The Nation at the OECD-Asian Roundtable on Corporate Governance last week that he recognises the significance of crowdfunding as an alternative fund-mobilisation vehicle for SMEs.

The regulator was working on ways to promote the industry. More tangible results will become apparent this year and next year.

"There are now 10 operators that are talking to us constantly.

"But we have to understand that this is something new for us and for every country, not just Thailand.

"And good operators who have filed for portals already will start to promote themselves and that, I believe, is the key," he said.

Crowdfunding is another portal to support the government’s joint venture efforts to help SMEs.

Promotion plans will have to be collaborative. The SEC is discussing with the National Science and Technology Development Agency to find out which SME groups should be promoted to the crowdfunding portals.

Not all SMEs are ready to meet investors and they have to be educated about crowdfunding first.

There is a need to find out what investors are looking for also before the full promotional effort can begin.

The watchdog is expected to arrange a crowding seminar together with the operators for this year or next year.

"Many saw tech start-ups as the future, but I have to admit that the SEC does not have enough data on how many they are and where they are," he said.

"I am not going to pretend that I know since I never met them and people who will meet them are portals and investors who are interested, so it was not on our radar."