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SME Bank began laying the foundations
for new work processes and organizational structure of the loan departments
in 2003, so as to befit the tasks of supporting and developing SMEs
in the cluster context, with linkages between upstream, midstream
and downstream businesses. The aim is to strengthen all SMEs along
the value chains, encompassing raw-material producers, processors,
manufacturers of parts, equipment and finished products, and those
selling of servicing the end consumers. Together they will become
the foundation for sustainable economic growth, generating employment
and income for the domestic households, as well as driving strategic
business clusters, such as the food, fashion and tourism clusters,
towards excellence in the global niches.
We
aim to add value and accessibility to its services, with integrated
financial and entrepreneurial support reaching customers at the grassroots
level in every province of the country. Our business philosophy is
non-competition with commercial banks, but filling the service gaps
that commercial banks are not daring or willing to provide. We will
be the driving force to facilitate access to the country’s abundant
liquidity for disadvantaged entrepreneurs presently un-served by the
commercial banking sector. Our core business is in financial services,
whether as term loans, factoring, leasing, hire purchase, bank guarantees
and other liabilities, aval, promissory notes, etc. Other value-added
services will be provided in collaboration with the network of public
and private-sector alliances with an aim to develop entrepreneurs,
add more service contact points, and create market opportunities and
business linkages among SMEs, both domestically and internationally,
adding to the economic and social values.
Our
business direction for the year 2004 will aim for continued organization
growth through expanded customer base covering all provinces, with
emphasis on new entrepreneurs and strategic clusters in accordance
with the national agenda. The Bank’s financial viability will
be maintained through expansion of customer base, enhanced efficiency
with the use of information technology and specialization of the human
resources, together with prudent risk management, and cost sharing
with alliances. The business approach is threefold, namely:
- Core Business Focus: undertaking operations in which the Bank
has expertise.
- Strategic Partnership: appropriately sharing expenses, risks,
and returns.
- Outsourcing: with economy and efficiency in mind, avoiding investment
in fixed assets and use of resources in operations which are non-strategic
or where the Bank does not have expertise.
We adopted the Balanced Scorecard
approach in developing its business strategy. The strategic direction
and key programs under each of five perspectives, namely financial
perspective, government or social perspective, market or customer
perspective, internal process perspective, and learning and growth
perspective, are as follows:
Financial Perspective
The strategic approach is to increase channels
of income, expanding lower-risk and high-return businesses so as
to generate sufficient revenue to compensate for high-expense, high-risk
services under the national strategy to alleviate poverty and generate
income distribution to the unprivileged. Key programs to be implemented
in continuation from 2003 are:
- Expansion of leasing and hire purchase, bank guarantee and inter-trade
services.
- Streamlining and shortening the loan approval process.
- Close monitoring of debt quality, prevention and resolution
of NPL in every classification, reducing the proportion of NPL
to a level comparable to that in the commercial banking sector.
- Raising capital, managing cost of fund, and generating revenue
from investments.
- Reselling and renting of non-performing assets (NPA).
Government or Social Perspective
The strategic approach is to re-organize
the loan departments in accordance with the government’s target
strategic clusters, and to collaborate with public and private-sector
alliances in the identification of potential clients, cost-sharing,
and risk control relating to the financial and development support
for new and underprivileged entrepreneurs, as directed by government
policy. The Bank’s accounts will clearly differentiate between
regular transactions and government policy oriented transactions.
Key programs under this perspective are:
- Support for provincial strategies, in close cooperation with
CEO governors, local private organizations (such as local chapters
of the Federation of Thai Industries and the provincial Chamber
of Commerce), and the network of SME & People’s Financial
Advisory Centers (SFAC).
- Special loan schemes for strategic clusters, such as the Thai
Cuisine to the World loan scheme.
- Loan assistance for chicken farmers damaged by the outbreak
of bird flu, and for modernization of chicken farms and processing
plants.
- Loan scheme for new entrepreneurs, such as the "Fulfill
and Farewell” loan for approved retirees under
the government’s Early Retirement Program, with bundled
entrepreneurship development package including investment opportunities
& business start-up information pack, entrepreneurial qualities
assessment tool, general and specific business training courses,
business plan clinic, and business mentor service. The services
are provided through collaboration with the Ministry of Industry
and other alliances.
- Loan scheme to promote second income opportunities for low-rank
officers, in cooperation with the Royal Thai Army.
- Loan scheme under the Assets Capitalization Program, to provide
financial support to entrepreneurs, allowing use of intellectual
properties, machinery, rental rights, etc., as guarantee for loans.
- Continuation of the tri-partite Financial Cooperation Project
for Development of Grassroots Economic Systems, in cooperation
with the Bank of Agriculture and Agricultural Cooperatives (BAAC)
and the Government Savings Bank (GSB).
- Hosting of the First Meeting for APEC Financial Institutions
Dealing with SMEs, following the signing of memorandum of understanding
between 12 institutions during the 2003 APEC Finance Ministers
Meeting hosted by Thailand.
- Implementation of the Public Service Account (PSA) accounting
system.
Market or Customer Perspective
The strategic objective is to increase
customer satisfaction and accurate comprehension of the Bank’s
services. Service differentiation is achieved through the provision
of value-added services in support of the customers’ business
development. The customer base will be expanded through proactive
marketing directed towards strategic clusters, new entrepreneurs,
micro enterprises, and provincial entrepreneurs. Access to services
will be provided at the district level, under field operations with
the network of alliances. Increased utilization of credit limits
will be encouraged through offers of loan packages suitable for
each customer segment. Awareness and confidence in the Bank’s
good governance and reputation as the dependable resource for small
and new businesses will be enhanced. Key programs under the market
and customer perspective include:
- Customer Relationship Management (CRM) to increase relations
and enhance customers' satisfaction.
- Integrated Marketing Communication (IMC) to infuse correct perceptions
of the Bank’s services among clients and SMEs at large.
- Mobile units for field operations by branch officers in conjunction
with local agencies, bringing financial services along with business
advisory by “SME counselors” to grassroots
communities, as part of a proactive marketing efforts to expand
customer base.
- Extension of inter-trade services with foreign currency transactions.
- Loan schemes for niche markets, such as energy conservation
loan, loan for improving manufacturing standards, loan for innovations,
loan for machine upgrading, loan for replacement parts inventory,
leasing for second-hand machinery, etc.
- “Expanding the Horizon” through
linkage with cross-border business alliances, for instance Thai-Japan
cooperation to facilitate study tours, participation in trade
exhibitions, business matching, and sourcing of second-hand machinery.
- Continuation of the "White Bank”
campaign with P.O. Box 1313, started in 2003, to allow customers
to notify of problems and opinions, while projecting the Bank’s
good image.
Internal Process Perspective
The aim is to enhance efficiency and
flexibility, through organizational and work-process restructuring
in line with the Bank’s missions and business strategies.
Work processes will be reviewed and streamlined. Standard operating
procedures and manuals will be put in place in every work system.
Information technology and management information systems will be
further developed to enhance speed, reduce operational cost, and
support timely management decisions. Quality, speed and accuracy
will be enhanced in all operations. Key programs under this perspective
include:
- Development of information technology systems, such as Electronic
Branch Network.
- Review and revision of standard operating procedures and setting
up in-house help desks.
- Review and revision of the Credit Risk Rating (CRR) and Credit
Scoring systems
- Development of Management Information System and Warning System
- Quality Year
Learning and Growth Perspective
The strategic objective is to instill
unity, organizational culture and loyalty. Best employees will be
commended as examples for others. Systems and tools for knowledge
management will be established to create a learning environment
utilizing all kinds of media. Human resource management will be
focused on putting the right persons to the right jobs, promoting
specialization, aiming for increased employees' satisfaction and
happiness in their working environment. Motivation will be based
on rewards that enhance employees' quality of life, while reflecting
job values and performance. Key programs include:
- Re-Branding and Best Employee Awards, with selection, awarding
and commendation of at least ten “Best Employees
of the Year”.
- Developing the "Training Roadmap"
for every job position at every level, Implementation of long-distance
learning, and awarding of scholarships in cooperation with educational
institutions.
- Further enhancement of the "Takkasila"
e-library, as the organization’s knowledge base made available
to both employees and clients.
- Creation of "in-house trainers" and
creation of "SME counselors" at every
branch office, based on the “Shindan”
business diagnosis curriculum, in which practical training sessions
for branch officers will simultaneously serve as actual diagnosis
service for the Bank’s clients.
- Revision of the salary structure, linking pays to professional
job value and performance.
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