SIFO’s operations were hindered by the limited source of fund, which was dependent solely on government budget, and lack of flexibility under governmental procedures. Consequently, the Small Industry Finance Corporation Act was enacted in 1991, transforming SIFO into the Small Industry Finance Corporation (SIFC) with a registered capital of 300 million baht, and a juristic person status allowing SIFC to raise capital domestically and internationally. In the year 2000, SIFC was re-capitalized with funds from the Ministry of Finance, increasing its equity to 2,500 million baht. Upon the present government’s policy to employ SIFC as the key mechanism to assist small and medium enterprises, which are the foundation of the Thai economy, the Small and Medium Enterprise Development Bank of Thailand Act came into force on 20 December 2002, re-establishing SIFC as the Small and Medium Enterprise Development Bank of Thailand or “SME Bank”.

SME Bank’s mandates are “to conduct business with the aim to develop, promote, and assist small and medium enterprises in the establishment, operation, expansion, or improvement of their businesses through the provision of loans, guarantees, venture capital, counseling and other necessary services as prescribed by the Act.”