BANGKOK, THAILAND (13 June 2024) — The Asian Development Bank (ADB) and Ngern Tid Lor (TIDLOR) have signed a $150 million (in Thai baht equivalent) loan agreement to support the development of micro, small, and medium-sized enterprises (MSMEs) in rural Thailand, particularly those owned and led by women as well as those who operate within the country’s agriculture value chain. 

ADB’s loan will be used to onlend to Thailand’s underserved rural MSMEs, with 75% of financing dedicated to women-owned businesses and the rest dedicated to agribusiness MSMEs. The project will focus on MSMEs in provinces outside Bangkok.

“MSMEs, especially in rural areas, struggle to access working capital and formal lending from banks. Many resort to informal channels that charge high interest rates and expose them to predatory practices. ADB’s support will provide reliable and affordable financing to help these businesses prosper,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “Women and the agriculture sector are key participants in the Thai economy, so it is essential to promote their access to financial services to foster inclusive and sustainable development.”

Thailand’s MSMEs are the backbone of the economy, providing the majority of employment and generating more than a third of gross domestic product. Women-owned or led businesses comprise more than half of all MSMEs. But the sector faces an ever-widening financing gap estimated to have reached $41 billion even before the COVID-19 pandemic hit.

ADB, through the support of the PRC Poverty Reduction and Regional Cooperation Fund, will also provide technical assistance to TIDLOR to develop a social finance framework (SFF), a first for a nonbanking financial institution in Thailand. This is part of ADB’s overall effort to  catalyze sustainable bond issuances across Southeast Asia.

The SFF will be aligned with the social bond principles of the Association of Southeast Asian Nations (ASEAN) and will enhance the transparency and uniformity of social bonds by clearly defining eligible social projects and establishing regular reporting requirements for lenders and investors. This will help TIDLOR in securing future loans or bond issuance as well as help attract social impact-minded investors in the Thai market.  

“We are pleased to partner with ADB in this project, which is fully aligned with our company’s strategy to promote financial inclusion with a digital- and data-driven approach. We also appreciate ADB’s technical assistance to help TIDLOR become the first in our industry to formalize its commitment to inclusive finance through a social finance framework,” said TIDLOR Managing Director Piyasak Ukritnukun. 

TIDLOR is one of the leading vehicle title finance lenders in Thailand. With over 1,678 branches nationwide, TIDLOR tailors its operations toward self-employed microentrepreneurs with thin or no credit history but who need to borrow to obtain working capital. It provides working capital financing to MSMEs by accepting movable assets such as used motorcycles, cars, and trucks, as well as farm equipment as security for loans.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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