Globalization is accelerating the economic integration of regional and global trading blocks, or more commonly known as Regional Free Trade Zones. Here is Asia, Association of South East Asian Nations (ASEAN) was established by the Bangkok Declaration on August 8, 1967, with 5 countries, including Indonesia, Malaysia, Philippines, Singapore and Thailand signing the original document. Membership has since been expanding and today ASEAN includes countries with Brunei Darussalam, Cambodia, Laos, Myanmar and Vietnam have been joined.
The 3 main objectives of the ASEAN declaration were to promote the economic, social and cultural development (Fig. 1) within the region. It was also established to maintain economic stability and regional security as well as to be used as a platform for disputes within the region. The three main pillars of the community are the ASEAN Security Community, Asian Economic Community (AEC) and ASEAN Socio-Cultural Community.
||Interaction between ASEAN connectivity and ASEAN community,
Economic Research Institute for ASEAN and East Asia (ERIA)
In economic terms, the AEC also has three pillars that will be the driving
force to the economic integration on 31 December 2015. These is a single market
and single production base, greater freedom in the movement of capital and skilled
labor and greater freedom in the movement of products (Chia,
The AEC Blueprint will transform ASEAN into a single market and production
base, a highly competitive economic region, a region of equitable economic development
and a region fully integrated into the global economy (ASEAN,
Free and open investment regimes are key elements to enhance ASEANs competitiveness in attracting Foreign Direct Investment (FDI) as well as intra-ASEAN investment. Sustained inflows of new investments and reinvestments will promote and ensure dynamic development of ASEAN economies (Fig. 2).
The AEC will establish ASEAN as a single market and production base making ASEAN more dynamic and competitive with new mechanisms and measures to strengthen the implementation of its existing economic initiatives, accelerating regional integration in the priority sectors, facilitating movement of business persons, skilled labor and talents and strengthening the institutional mechanisms of ASEAN. This will lead to the development of higher standards of living as well as increasing the regions living standard while reducing the social inequality gap.
Significant progress has already been made in identifying those Non Tariff
Barriers (NTBs) that affect intra-regional trade the most. The identification
process involved a number of important steps which led to the decision to focus
on those NTBs that affect the most widely-traded products in the AEC region.
These products included minerals, electrical appliances and machinery. In 1994
when these were initially identified, these products made up nearly 55% of Indonesia's
imports, over 64% of Malaysia's imports, over 50% of the Philippines' imports
and nearly 70% of Thailand's imports (ASEAN, 2014). It
therefore is a great opportunity for Thailand and the nations entrepreneurial
businesses to adapt and take advantage of the reduction so the reduction in
trade barriers benefits trade and investment fully.
With Thailands goal of economic development and the spread of prosperity
within the region, there must be a strategy focused on developing countries
to generate economic growth. But entrepreneurial enterprises in Thailand entail
mostly Small and Medium Enterprises (SMEs) and micro-enterprises which represent
99% of the total businesses. Of this, micro-entrepreneurs with employees up
to 5 people with capital creation of up to 100,000 baht accounted for commercial
registration (OSMEP, 2007) of which 66.95% of the total
number, SMEs (OSMEP, 2010) are experiencing financial
problems. Factors include lack of financial resources, lack of access to capital
and lack of promotion marketing which all contribute to SMEs being unable to
compete contributing to higher debt and losses.
In addition, micro-enterprises, which includes the vast majority of Thai businesses have no financial business plans, no financial or unreliable records or have no collateral to offer to secure a loan. Thus, they have difficulty accessing credit from financial institutions.
Usually however, short-term credit to micro-enterprises is very small and steps to a fast and hassle free loan should focus on a convenient source of credit with good and fast service, instead of the amount of the interest rate.
|| Dr. Muhammad Yunus
Therefore, micro-enterprises using informal sources of credit, accounted for
44.44% of all micro-enterprise financing. These loans from informal money lenders
occurred with relatively high interest rates (OSMEP, 2008)
due to the quickness of getting money with minor procedural hassles and no need
for personal guarantees. Growth in microenterprises seems to suffer from a variety
of factors, of which lack of access to finance, infrastructure and markets and
poor quality technology and regulatory barriers appear to be most common (World
Bank, 2004; World Bank, 2007).
Microcredit as an alternative for small entrepreneurs, can help to solve the problems for the small businesses and entrepreneurs. Microcredit is a means of fighting poverty which in Bangladesh was realized when Muhammad Yunus (Fig. 3) in 1983 established the Grameen Bank which sought to realize his vision of self-support for the very poorest people by means of loans on easy terms. The bank has since been a source of inspiration for similar microcredit institutions in over one hundred countries.
The implementation of Grameen Bank principals alleviates poverty, contributes to the creation of jobs, creates income stability and creates a better life for their members. Banks in the traditional system have been reluctant to lend money to anyone unable to give some form or other of security. Grameen Bank, on the other hand, works on the assumption that even the poorest of the poor can manage their own financial affairs and development given suitable conditions. The instrument is microcredit, which is small long-term loans on easy terms.
By the time, Grameen Bank and Muhammad Yunus were co-awarded (The
Norwegian Nobel Institute, 2006), more than seven million borrowers had
been granted such loans. The average amount borrowed was 100 dollars and the
repayment percentage was very high with over 95% of the loans going to women
or groups of women. Experience showed that ensured the best security for the
bank and the greatest beneficial effect for the borrowers' families.
In the effort of the poor to escape poverty, microcredit/microfinance has received considerable attention from economists and politicians which view these financing vehicles as a tool to alleviate poverty and stimulate economic growth by providing small loans to under privileged and poor individuals, organizations or groups.
Because small enterprises are essential to the local economy, it is essential
that entrepreneurs are strengthened and be given the opportunity that enables
them to improve their efficiency of doing business while both reducing unemployment
and poverty (Walls et al., 2001).
For Thailand today with more than 2 million small and medium-sized enterprises (SMEs) representing 99% of the total, microcredit is one tool in helping domestic micro-enterprises (Fig. 4).
One of the urgent measures in the Thai national plan is to solve credit access
problems of SMEs. The Thai government has taken a major role in bestowing financial
assistance to SMEs by setting target loans provided through the Specialized
Financial Institutions (SFIs) and promoting loans provided by commercial banks.
These measures intend to allow faster release of financial credit to SMEs and
solve NPL problems. Besides, measures in the national master plan, the government
has launched the Village Fund Project aiming to alleviate poverty problems particularly
in rural areas and to boost economic recovery. This project provides working
capital for people and small home industry in villages by an amount of one million
baht per village. This however isnt enough as by the end of 2004, only
a total of 224,000 million baht had been allocated to the villagers throughout
the country. The proportions of allocated funds are 67% for agriculture, 17%
for trading, 6% for emergency, 4% for industry and 4% for service (Poonpatpibul
and Limthammahisorn, 2005). Therefore, microfinance must take on the larger
role that government cannot fill.
In addition, Phuket as the largest island province in Thailand whose economy is centered marine and ocean tourism has become a large and growing source for potential business, employment and foreign tourism. The population has increased steadily with a higher standard of living and consumption rate compared to other regions. Therefore, it is necessary to have SMEs to meet the needs of consumers in Phuket. In 2011, a Phuket province census found that one in 7 households had an entrepreneurial business and the business operator suffered from lack of loans.
The researchers objectives therefore were to study factors affecting the financing of entrepreneurial companies in Phuket. The purpose of the research was to assist in developing systems for entrepreneurial and small business funding which helps with the survival of small enterprises.
Microfinance: Microfinance is the most useful and popular financial
system in the world to face financial crisis of the poor people. It gives loan
to those people whom the government or any commercial bank will not give loan
facility. Both for rich and poor countries of the world, microfinance tries
to improve access to loans and saving services for low-income, low-wealth people
which is the fastest-growing and best-known tool to combat poverty (Islam
et al., 2012).
The terms microcredit and microfinance are often used interchangeably but there
is a difference between them. Microcredit refers to the act of providing the
loan. On the other hand microfinance is the act of providing these same borrowers
with financial services, such as savings institutions and insurance policies
(Sengupta and Aubuchon, 2008).
Research by Chiamchittrong (2010) evaluated the performance
of annual sales or income and others including (McFadzean
et al., 2005) gross profit/gross margin, cash flows action and operating
cash flow and net income (Wattanakul, 2002). Concerning
the general public (Polsaram, 1998), organizational images
Trainer (2002a) thesis concerning The Simpler
Way, it was discussed how life and communities could be simplified with
simpler lifestyles in small, highly self-sufficient local economies where individuals
were more cooperative in creating a new economy, producing less than the present
economy. These individuals should also exhibit different values, especially
cooperation not competition and frugality and self-sufficiency not acquisitiveness
and consuming. Additionally, Trainer (2002b) argued that
there must be a new approach to poverty alleviation and the old neo-classical
approach doesnt work.
Wakoko (2003) found that African womens empowerment
is due to both their indirect access to land (e.g., through hypergamy) and also,
through direct access to other resources (e.g., employment, education and credit
use). As such, the extent to which these resources empower women depends on
the nature of womens experiences with them either as owners, users or
when they are in control of them. Second, that a number of factors mediate the
effects of each resource (including credit/savings), on women.
This is also consistent with the study of Hussain et
al. (2001) which investigated the prospects of the implementation of
a Grameen Bank/microcredit type banking system in the European socio-economic
and cultural contexts.
Membership: Kiso (2008) noted that micro-finance
institutions are different from banks in that their customers appear as members.
With this membership, loans are made as group loans with shared
responsibility to pay the debt, which also increases your ability to pay back
debts to the lending financial institutions. Membership loans are mainly to
females (Faridi, 2004) because the risk of lending to
female is less than males (Hassan and Renteria-Guerrero,
1997). Endeavors which have existed for many years, increases the ability
to obtain a loan and more credit because a bank can verify your past business
relationships (Chiamchittrong, 2010; Nopwattanapong,
Responsibility: Factors contributing to the successful measurement of business organizations include not only operations and financial data, but also product quality, employee satisfaction, the environmental hazards on the environment and their impact on society which is "Corporate social responsibility-CSR".
CSR is defined by the European Commission as "the responsibility of enterprises
for their impacts on society" The Commission encourages that enterprises "should
have in place a process to integrate social, environmental, ethical human rights
and consumer concerns into their business operations and core strategy in close
collaboration with their stakeholders" (European Commission,
This is crucial for businesses and enterprises and they should take into account
the strategic importance of social responsibility (Wongprasert,
2009) which includes the responsibility of businesses with its employees,
the responsibility of a business to its creditors, the responsibility of the
business to its investors and its overall Corporate Social Responsibility (CSR).
Harraf (2008) noted that microfinance help the poor
to access capital when money is difficult or impossible to obtain. Microfinance
also has a social benefit. This is consistent with the study of Hussain
et al. (2001) who said that Grameen Bank helps and gives social development
opportunities to the disadvantaged. If any members of the group are weak and
need help, a supportive social network helps, cultivate good saving habits for
the poor. The nature of the lending group should also help create a shared responsibility
and make the funding a joint responsibility.
The lender should also be involved with training members of society and helping
them with the knowledge to help each other (Valente, 2011)
to achieve trust, credibility and the expectations of society, such as a standard
product/service, development/extension and products/services. It is also necessary
to provide opportunities for the disadvantaged. The lending group shares responsibility
and is funded jointly and shares debted responsibility together while guaranteeing
the network (Kiso, 2008; Iqbal, 2002;
Knowledge management: Marquardt (1996) quote,
Empowered workers are able to make decisions as good as, if not better
than the decisions made by managers because the workers, in fact, possess the
best information is important to the concept of knowledge management.
Knowledge has become more important for organizations than financial resources,
market position, technology, or any other company asset. Individuals may come
and go, but valuable knowledge cannot be lost or the company starves to death.
It includes the acquisition, creation, storage, transfer and utilization of
Marquardt (1996) also went on to state that involving
the community as a part of the learning process brings many benefits, it may,
for example prepare potential future workforce and enhance the companys
The top strategies for people empowerment and enablement in learning organizations:
||Institute personnel policies that reward learners.
||Create self-managed work teams
||Empower employees to learn and produce (information workers with knowledge
about financial, technical and other data so that they can make wiser decisions)
||Encourage leaders to model and demonstrate learning
||Invite leaders to champion learning processes and projects
||Balance learning and development needs of the individual and organization
||Encourage and enhance customer participation in organization learning
||Provide education opportunities for community
||Build long-term learning partnerships with vendors and suppliers
||Maximize learning from alliances and joint ventures
In measuring business success, there are several other theories for measuring
both quantitative and qualitative targets. One such theory was introduced in
a 1992 Harvard Business Review article (Kaplan and Norton,
1992), in which David Norton and Robert Kaplan undertook a multi-company
research project to study performance measurement in companies whose intangible
assets played a central role in value creation according to Nolan Norton Institute
in 1991. The researchers believed that if companies were to improve the management
of their intangible assets, they had to integrate the measurement of intangible
assets into their management systems. During the next 15 years, the original
balanced scorecard (BSC) strategy performance management tool was adopted (Fig.
5) by thousands of private, public and nonprofit enterprises around the
world, the researchers extended and broadened the concept into a management
tool for describing, communicating and implementing strategy.
Organizational factors: Organizational factors within an organization
can either strengthen or weaken the entity so they must seek opportunities and
avoid obstacles that may occur (TPI, 2005) The organization's
policies are the factors that make your business successful or not. The relevant
policies in project planning (Katawut, 2012) which are
related to organizational strategic planning and operations have different characteristics
in microfinance compared to those of larger financial lending institutions.
As a result, both policy and strategy related to loans are different from general
lending institutions (Hadisumarto and Ismail, 2010),
as well as the type of business lenders, the nature of the lender, the type
of use which includes other factors and conditions such as the size of the credit
limit, interest rate and payment rate.
After a literature review and development of the above concepts, the following hypotheses were developed. They have been presented in Fig. 1 and 2 for better visualization:
||H1: Membership influences microfinance
||H2: Membership influences responsibly
||H3: Membership influences knowledge management
||H4: Knowledge management influences microfinance
||H5: Responsibility influences microfinance
||H6: Organizational factors influences microfinance
The sample population or unit of analysis for this research included bank executives in both the private and public sector.
Data collection: Questionnaires were constructed to be a tool to measure concept definition and practice and were compiled from the literature. The content and structural validity were determined by Item Objective Congruent (IOC) and by 5 experts in their related fields. The instrument or questionnaire used the 7-Point Likert Scale as the measurement scale. The conceptual framework for determining the internal consistency was measured by coefficient alpha (α-coefficient) of Akron BAC (Cronbach) to calculate the average value of the correlation coefficient:
||Quantitative research: Stratified sampling was used
in the research as it offers significant improvement over simple random
sampling as simple random sampling tends to have larger sampling errors
and less precision than stratified samples of the same sample size. Stratified
sampling is a probability sampling procedure in which the target population
is first separated into mutually exclusive, homogeneous segments (strata)
and then a simple random sample is selected from each segment (stratum).
The samples selected from the various strata are then combined into a single
sample. This sampling procedure is sometimes referred to as quota
The researchers adopted a survey research design in this study in which stratified sampling was applied to pick the sample size from commercial, private and public sector banks. Data was collected through questionnaires from 200 respondents. The same was analyzed using frequencies and percentages. A regression analysis was also conducted:
||Qualitative research: Qualitative research was conducted
by collecting information from themanagement of individual banks to verify
the models derived from quantitative research. With a sample of 10 individuals
selected for sampling, by use of non-probability sampling techniques while
using randomsampling (purposive sampling)
|| Statistic values presenting convergent validity of reflective
scales of latent variables
||Dependent variable: Microfinance (Micro-finance) analysis
used a measurement instrument or questionnaires utilizing a 7-Point Likert
Scale (Likert,1972) and have been constructed with
the scales developed enabling measurement of Corporate Image (image), Profit
(profit) and Revenue (revenue) (Islam et al.,
2012; Chiamchittrong, 2010; McFadzean
et al., 2005; Wattanakul, 2002; Polsaram,
||Independent variables: Membership (Member) analysis used a measurement
instrument or questionnaires utilizing a 7-Point Likert Scale (Likert,1972)
and have been constructed with three aspects (Table 1)
including Relationship (relation), Creditability (credibility) and Experience
(experience) (Kiso, 2008; Faridi,
2004; Hassan and Renteria-Guerrero, 1997; Chiamchittrong,
2010; Nopwattanapong, 2007)
Responsibility (Responsibility) analysis used a measurement instrument or questionnaires
utilizing a 7-Point Likert Scale (Likert,1972) and have
been constructed with four aspects (Table 1) including Debt
Repayment (respond_debt) and Social Responsibility (respond_social) (Wongprasert,
2009; Harraf, 2008; Hussain
et al., 2001; Valente, 2011; Iqbal,
2002; Wakoko, 2003; Kiso, 2008).
Knowledge management (Knowledge) analysis used a measurement instrument or
questionnaires utilizing a 7-Point Likert Scale (Likert,1972)
and have been constructed with four aspects (Table 1) including
Knowledge Type (type) and Learning Method (learn) (Marquardt,
1996; Kaplan and Norton, 1992; Wakoko,
2003; Loucks et al., 2010).
Organizational factors (Organization factor) analysis used a measurement instrument
or questionnaires utilizing a 7-Point Likert Scale (Likert,1972)
and have been constructed with four aspects (Table 1) including
Departmental Strategies (strategy), Policies (policy) and Credit Terms (condition)
(TPI, 2005; Katawut, 2012; Hadisumarto
and Ismail, 2010; Iqbal, 2002; Kajimo-Shakantu
and Evans, 2007).
Partial Least Squares has been applied for analysis of quantitative data by
the researcher. It is data analysis for Confirmatory Factor Analysis (CFA) relating
to the determination of Manifest Variable and Latent Variable and testing of
research hypothesis exhibiting in structural model analyzed by using the applications
of PLS-Graph (Chin, 2001).
According to the analysis result of scale validity and reliability, scale investigation has been conducted using internal consistency measurement coefficient alpha (α-coefficient) of Akron BAC (Cronbach) to calculate the average value of the correlation coefficient. It was found that alpha coefficients ranged from 0.524-0.937, which is considered to have high reliability.
In case of measure variables with reflective analysis, convergent validity
has been conducted. Loading is used as consideration criteria and must be positive
quantity and indicator loading has been more than 0.707 and all values have
been statistically significant (|t|≥1.96) representing convergent validity
of scales (Lauro and Vinzi, 2004; Henseler
et al., 2009) quoted in Piriyakul (2010)
and analysis results as shown in Table 1.
Membership (member) factors underlying the external variables influence on Creditability (creditability), Relationship (relation) and Experiences (experience) with loading values of 0.8174, 0.8354 and 0.8555, respectively. There was a significant level of 95% confidence (t-stat>1.96), which considers such factors highly reliable. These factors affect Microfinance.
Responsibility (responsibility) factors underlying the external variables influence on the responsibility for Debt Repayment (respond_debt) and Social Development (respond_social) with loading values of 0.9254 and 0.9499, respectively. There was a significant level of 95% confidence (t-stat>1.96), which considers such factors highly reliable. These factors affect Microfinance.
Knowledge management (knowledge) factors underlying the external variables influence on Knowledge Type (type) and Learning Method (learn) with loading values of 0.9336 and 0.9434, respectively. There was a significant level of 95% confidence (t-stat>1.96), which considers such factors highly reliable. These factors affect Microfinance.
Organizational factors (org.factor) factors underlying the external variables influence on Departmental Strategies (strategy), Policies (policy) and Credit Terms (condition) with loading values of 0.9042, 09107 and 0.9255, respectively. There was a significant level of 95% confidence (t-stat>1.96), which considers such factors highly reliable. These factors affect Microfinance.
Microfinance (micro-finance) factors underlying the external variables influence on Corporate Image (image), Profit (profit) and Revenue (revenue) with loading values of 0.8575, 0.8809 and 0.8967, respectively. There was a significant level of 95% confidence (t-stat>1.96), which considers such factors highly reliable.
The above reflective model in Table 1 shows the discriminant
validity of the internal latent variables and the correlation of variables.
It also depicts the scale reliability which has been analyzed from Composite
Reliability (CR) as well as the Average Variance Extracted (AVE) and R2.
The CR value should not go below 0.60 and the AVE values should also drop below
0.50 and R2 values should not be under 0.20 (Lauro
and Vinzi, 2004; Henseler et al., 2009)
(Boontawan and Montree, 2010) (Table
An analysis of structural equation modeling of relationship factors affecting entrepreneurial microfinance in Phuket, Thailand found that of the 6 assumptions, only hypothesis 1 and hypothesis 4 were not supported, which means Membership and Knowledge Management have no direct or positive effect on Microfinance of Phuket entrepreneurs (Table 3). Additional factors with an indirect or positive effect for micro financing of island entrepreneurs can be viewed in Fig. 6 and 7. The final model for the research appears in Fig. 6.
|| Results of Confirmatory Factor Analysis (CFA) for measurement
|Statistical significance level is at 0.01 and diagonal figures
|| Research hypotheses test results
|| Results model
The Hosmer-Lemeshow test (Table 4) is a statistical test for goodness of fit or logistic regression models. It is used frequently in risk prediction models. The test assesses whether or not the observed event rates match expected event rates in subgroups of the model population. The Hosmer-Lemeshow test specifically identifies subgroups as the deciles of fitted risk values. Models for which expected and observed event rates in subgroups are similar are called well calibrated.
Model validation or PLS fit index is a measure of the following GoF equation
as follows (Piriyakul, 2010):
|| Final model-analysis of factors that affect microfinance
||Influencing factors affecting the credit support to small
entrepreneurs and the influence of the Hosmer-Lemeshow Goodness of Fit (GoF)
Conclusion from the above calculation: Goodness of Fit (GoF) = 0.879x0.833
= 0.955 or 96%.
It can be concluded that the accuracy of the overall structural equation model and measurement equation is greater than 96%.
RESULTS AND DISCUSSION
The findings and influencing factors from the Structural Equation Modeling of Relationship Factors affecting Entrepreneurial Microfinance in Phuket, Thailand revealed that:
||Organizational factors influencing variables consisted of
strategies, policies and credit terms which can either strengthen or weaken
the entity so they must seek opportunities and avoid obstacles that may
occur (TPI, 2005). As a result, both policy and strategy
related to loans are different from general lending institutions (Hadisumarto
and Ismail, 2010), as well as the type of business lenders, the nature
of the lender, the type of use which includes other factors and conditions
such as the size of the credit limit, interest rate and payment rate. As
an example, a loan or group of loans without collateral or sizelenders to
the bank determines the different conditions of the banks. As a result of
the policy, plans and strategies of organizations need to analyze the factors
within the organization to find the strengths or weaknesses of the organization
that is able to seek business opportunities and avoid obstacles that may
occur (TPI, 2005)
||Responsibility consists of the development of social responsibility and
commitment to the community which is consistent with the research by Wongprasert
(2009) which noted that a measure of the success of the organization,
is not only the earnings but it must be responsive to the expectations of
society, or in other words, have social responsibility. It is
a factor that can determine the survival and advancement of the business
to sustainable growth in the future
This is consistent with the study of Hussain et al.
(2001) who said that Grameen Bank helps gives social development opportunities
to the disadvantaged and underprivileged. If any members of the group are weak
and need help, a supportive social network helps cultivate good savings habits
for the poor. The nature of the lending group should also help create a shared
responsibility and make the funding a joint responsibility (Kiso,
2008; Wakoko, 2003).
Additionally, it was found that Membership factors dont have a direct
and positive influence on support lending to households and small businesses.
But it does have a positive and indirect effect through the variable Responsibility.
Membership components included experience, credibility and relationships as
the three factors are consecutive, because of the nature of loans to households
and small businesses in such a group (Kiso, 2008).
So, the experience of the operator and the age of acquisition of the financial
information that is collected for the same consideration to credit (Chiamchittrong,
2010; Nopwattanapong, 2007), because when more experienced,
age of business represents a small, reliable and has good relationships with
Microfinance factors consisted of revenue, profits and image which is consistent
with the theory of the business and the Balanced Score Card (BSC) did not measure
the performance of management, particularly financial, which include gains on
sales (Chiamchittrong, 2010), income (McFadzean
et al., 2005; Wattanakul, 2002) because revenues
and net income, which is a measure of the ability to pay the debts of the business,
should have a positive impact on the business opportunity to earn credit (Nopwattanapong,
2007). But the non-financial measures, such as new product development,
product updates and the image of the organization is the image of the company.
With mean to 3.08, the average of the highest in the 4 models (4 models include
profitability, market share, growth rates of sales and brand image) (Polsaram,
The study of the Structural Equation Modeling of Relationship Factors affecting Entrepreneurial Microfinance in Phuket, Thailand revealed that Organizational Factors had the greatest influence on the microfinance bank with the most important factor being various terms and lending conditions of the banks due to the differences of each institution.
This was followed by Responsibilities which included the development of social
responsibility and commitment to the community. However, it was interesting
to note that Knowledge Management did not influence support lending to households
and small businesses. The organizations view themselves as offering assistance
to people so that they can find their own way out of poverty-a "helping hand,
not a hand out" (Valente, 2011), expecting their clients
to repay their loans.
Support lending to households and small businesses provides opportunities for entrepreneurs who do not have access to capital. The microfinance lender can provide liquidity or capital that helps a business survive. With economies such as Thailand so dependent on small and medium sized businesses with over 1.7 million SMEs in 2002 employing nearly 5 million, it is easy to see how crucial microfinance is for the countrys health and growth.
The microfinance system of Grameen Bank was a revolutionary tool to eradicate poverty of the rural people especially the women of Bangladesh. At present Grameen Bank is the largest microfinance bank in Bangladesh and probably the biggest microcredit organization in the world. It provides loans to asset-less and landless poor people whom no commercial bank will give a loan. With microcredit being the most useful and popular financial system in the world, shouldnt Phukets island entrepreneurs and Thailands SMEs also enjoy the benefits of such an innovative and useful institutional process.