According to a report by the Bangkok Post, the Securities and Exchange Commission (SEC) in Thailand is finding ways to support social enterprise development through capital markets.
“As a regulator, the SEC can help by setting up rules. We’re studying whether to set up a new [trading] sector in the market exclusively for them,” said Voraphol Socatiyanurak, Secretary General of the SEC.
Already there have been similar moves in other areas of Asia that aim to connect social enterprises with much needed funding, such as the Impact Investment Exchange Asia – a stock exchange exclusively for social enterprises.
Social enterprises in Thailand are organized as foundations and non-profit organizations among others, yet they strive to become financially self-sufficient rather than rely on donations. They apply commercial strategies to address social and environmental problems, and these social missions are generally the reason for their existence. As profit maximization is not their main priority, it would be difficult for them to compete in traditional markets for capital.
Socatiyanurak explains that social enterprise stocks will give low returns as surpluses are reinvested to the company and society. If a social enterprise raises funds from the public, shareholder portion will be limited at 35% of capital to avoid shareholders from intervening.
“It is essential that they survive by themselves. It isn’t logical to expect a small group of people who can hardly help themselves to help society. The practical way is to design a system so they can make enough money to stand on their own,” said Professor Chalermchai Boonyaleepun of Srinakharinwirot University in regards to social enterprises.
Busaba Chirathivat, Senior Vice President for Corporate Communications at the Central Retail Corporation, said that social enterprises are an option for people looking to support good companies and will motivate other businesses to follow suit.
“At some point, for-profit businesses and social enterprises can both contribute to society and investors will base their decisions on quality. Therefore, social enterprises must be able to compete in the business world,” said Chirathivat.
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