Knowledge management, responsibility and organizational factors that affect microfinance support to Phuket, Thailand entrepreneurs

Abstract

The financial cost of entrepreneurial borrowing in Thailand, in particular Phuket, an island province with a large tourism and marine industry, is difficult and expensive. With the bank of Thailand's recent rule changes, licensed yearly bank loans of greater than 15% are now legal but the inability to get loans from legitimate sources still drives the small borrowers into the arms of loan sharks who charge as much as 20% a month. Still, these same licensed financial institutions continue to offer almost no lending services to very small business operators, particularly street vendors and wet market traders, because borrowers such as these lack financial and accounting track records and are high-risk. In Bangladesh, however, the Grameen Bank microfinance system implemented a revolutionary tool to eradicate poverty of t h e rural people and overcome the many obstacles to lending, becoming 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. This study is, therefore, focused on the mechanisms that affect the 37% of all loans made within Thailand, specifically those made to SMEs and various forms of entrepreneurs. The researchers, therefore, undertook this study focusing on influences of knowledge management, organizational factors and client responsibility that affect microfinance support. Phuket province was selected, as it has a significant tourism and marine industry largely made up of smaller, entrepreneurial enterprises.