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close this bookNeeds and Characteristics of a Sample of Micro and Small Enterprises in Thailand - Working Paper N5 - Micro and Small Enterprise Development and Poverty Alleviation in Thailand - Project ILO/UNDP: THA/99/003 (ILO-ISEP - ILO - UNDP, 1999, 102 p.)
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View the documentForeword
View the documentPreface
Open this folder and view contents1.0 Background
Open this folder and view contents2.0 Survey of selected Thai urban-based MSEs
Open this folder and view contents3.0 Characteristics, problems and needs of Thai MSEs
Open this folder and view contents4.0 Notes on statistical findings
View the document5.0 Recommendations
Open this folder and view contentsAnnexes
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5.0 Recommendations

Although the main purpose of this working paper is to present the results of the small-sample survey, which serves as a form of “reality check” to confirm or verify former knowledge of MSEs, the information gathered from the survey has been analyzed and several issues have become apparent which have implications for the development of MSEs. These issues have been used to make recommendations for urban-based MSE development as follows:

Recommendation 1: Provision of business development services (BDS)

Since most enterprises reported that no business development services (BDS) have been made available to them, it is recommended that a BDS delivery framework is developed to ensure that MSEs are benefiting effectively from these services. As part of this effort, various agencies or organizations should be identified in terms of the particular services that they can effectively make available to MSEs, both in Bangkok and in the provinces. An action plan should then be developed to ensure that these agencies and organizations are well-equipped and capable of reaching the designated target groups, and delivering the services to the micro and small enterprises in need. Following on from the results of this ILO/UNDP survey, the services to be provided should cover at least the following:

· marketing assistance;

· networking assistance;

· training in simple accounting and financial management, including budgeting;

· advisory and information services on technology management and productivity improvement;

· advisory and information services on taxes, laws and regulations;

· advisory and information services on market opportunities and product development;

· access to the market for skilled workers, as well as skills development services for existing workers;

· training in basic business concepts, the business environment and business planning;

· training in entrepreneurship development; and

· training in opportunity identification.

Recommendation 2: Provision of alternative financing

As reported earlier, most MSEs have problems with the present system of credit financing using collateral. Therefore, it is recommended that a non-collateral credit or a non-loan-financing scheme be developed and made available to the MSEs. The financing scheme should be based upon the merits and viability of the business proposals submitted by the entrepreneurs, and should not impose heavy burdens on the enterprises. It is also recommended that the delivery of the scheme should be through local agencies or organizations which have the potential to effectively reach out to the existing enterprises and potential entrepreneurs. It is also recommended that the provision of the financial services be performed in close cooperation with the BDS provision, in order to ensure that the entrepreneurs are capable of preparing their business proposals, and that the enterprises receiving the financial services will have a high probability of being successful.

Recommendation 3: Further studies

As this survey has been carried out with only a small sample, and is not comprehensive, it is recommended that more a comprehensive and detailed study be conducted to examine specific characteristics of the MSEs, such as their need for and access to BDS support; the relationship between MSEs’ sales, asset value and number of workers; appropriate age of potential entrepreneurs to start a business; the impact of education levels on business prospects; and identifying and addressing a range of gender issues affecting micro and small enterprise development in Thailand. Such a study should provide an accurate basis upon which various policies and support measures regarding MSEs can be established.

Recommendation 4: Representative associations

It is recommended that business associations among MSEs be promoted in Thailand, as these have been proven to be highly beneficial elsewhere. Entrepreneurs should be made more aware of the importance and usefulness of these associations, and urged to participate actively. Initially, the associations should be assisted and strengthened (through targeted government support) in order that their functions can be effectively performed. These functions should cover at least the following:

· representing the MSEs in dealings with government and other parties;
· providing or acting as a vehicle for the provision of BDS to the MSEs; and
· being a focal point in monitoring the development and needs of MSEs.

The associations of MSEs might be established independently, or within the present framework of the Employers’ Confederation of Thailand (ECOT), ECONTHAI, or the Thai Chamber of Commerce.

Based on the findings of this survey, the editor also adds the following two recommendations.

Recommendation 5: A study on the factors affecting women entrepreneurs.

It is recommended that a further detailed study be carried out to determine the existing barriers and constraints (including physical, procedural and psychological) facing first-time women entrepreneurs in Thailand. In addition, the study would be expected to recommend practical and tangible remedial actions which can lead to greater economic empowerment of women engaged in micro and small enterprise activities. [Editor’s addition]

Recommendation 6: Access to skills upgrading for MSEs

It is recommended that appropriate forms of educational upgrading and skills training programmes be provided for owners and workers in the micro and small enterprise sector. This would be a substantial contribution to human capital development, and it would also help to elevate vulnerable groups and enable them to identify less marginal economic activities, as well as contributing to the overall competitiveness of the MSE sector and Thai industry in general. [Editor’s addition]