ERP fund to aid Sme sector, thai developers

Alliance will give loans for IT purchases to small-, medium-sized businesses

In a bid to help the local software industry gain a bigger share of the domestic market, the Association of Thai Software Industry (ATSI) plans to collaborate with other government organisations to roll out the "ERP Fund" for the small and medium enterprises (SMEs) across industry sectors.

The other government organisations include the SME Bank and the Office of Small and Medium Enterprises Promotion (OSMEP). They will establish the fund to provide long-term loans at low interest rates to SMEs across industries.

Vice president of ATSI Anuntachote Chaovanayotin said that under the plan, the association will work with the SME Bank and OSMEP to set up a fund to help SMEs invest in enterprise resource planning (ERP) software from Thai software developers.

The SME Bank and OSMEP will work as fund managers who will consider and approve the loan for each SME, while the association will work as a consultant for the fund as well as the SME which wants to improve its business efficiency with local ERP software.

"We will provide consultancy to the fund manager on how to evaluate SME requirements. We will also provide consultancy for SMEs on how to source local ERP software that suits their requirements," Anuntachote said.

The fund will approve long-term loans with low interest rates to SMEs through a cluster model in order to create an impact on each kind of industry's supply chain. For example, in the textile cluster, the fund will consider loans for various companies in the textile's supply chain such as button factories, string factories, fabric factories and dye factories.

Each cluster will receive funding of about Bt10 million, though one company will be eligible for a maximum loan of Bt3 million.

About 50 per cent of this must be spent on local application software, especially local ERP applications.

The rest can be spent on hardware, networking equipment and maintenance services.

The loan will be provided interest-free for the first three years. After that, SMEs will pay low interest rates until the end of contract.

"Why ERP? Because SMEs need to invest in ERP to improve their business efficiency and competitiveness. However, the investment required in ERP is higher than their capability. This project will help SMEs gain more channels to invest in this crucial application through an affordable model. This project will also help create demand for local software," Anuntachote said.

To turn this idea into reality, collaboration between many organisations is required. As of now, the association is approaching the Information and Communication Technology Ministry through the Software Industry Promotion Agency and the Industry Ministry.

The association is also talking to the SME Bank, OSMEP as well as the Federation of Thai Industries.