Pico Microfinance with Limited Partnership

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G.A.M. Legal Alliance > Pico Finance > Pico Microfinance with Limited Partnership

Compare the Pico Microfinance with Limited Partnership to the Pico Microfinance with Limited Company. For those who wish to open a business in Thailand as a Pico Business in the Finance sector. Then this is how to enter the microloans sector in the country. The Thai government has moved to open the micro loan sector in order to lower the occurrence of loan sharks. There has been more than 9,000 loans sharks that the government had noticed. This was mainly for short terms loans.

Pico Microfinance with Limited Partnership

So they decided to open the micro-lending business. The micro-loans has been done on a provincial level. The Pico Finance Loans under supervision has not been a new untapped sector in the market. Loans are made to people who live in the province. The individuals must be domiciled or residing in the province where the head office of the Pico business operator is located. Likewise also see the article we wrote on the Pico license for a limited company.

Types of Loans:

1. Pico Finance Loans:

– Credit limit: This may not exceeding 50,000 baht per person.

– Interest rate ceiling: There is a maximum of 33% per year with collateral. Likewise there is a 36% per year without collateral (Effective rate). So we see that the loan percentages are lower with collateral.

2. Pico Plus Loans:

– Credit limit: The Pico Plus are limited to 100,000 baht per person.

– Interest rate ceiling: Likewise a maximum of 33% per year with collateral and 36% per year without collateral. This for loans up to 50,000 baht. Likewise 28% per year for loans over 50,000 THB but less than 100,000 THB (Effective rate).

You will note that there are two types of operators. The Pico and Pico Plus are different businesses. The Plus type of business are mainly for operators who hold more paid up capital. You can see this below. Note that this is for a limited partnership and you can also see the Pico license for a Company which can also be seen here.

Regulations and Requirements:

The provision of Pico Finance loans is similar to banking operations. They do require permission from the Minister of Finance. Likewise those granting loans that fall under Pico Finance loan characteristics. They must request permission and adhere to conditions set by the Ministry of Finance. This is supervised by the Fiscal Policy Office (FPO).

Note that the FPO, through the Public Financial System Development Policy Division (PEPC), have updated the Public Financial System Manual for those interested in operating a provincial-level microfinance business. The following steps should be followed to request permission correctly:

1. Preparing Documentary Evidence:

– You will need to ensure that your documents are accurate.

– Complete the forms with correct spelling and truthfulness especially names.

2. Criteria of license applications (Standard and Plus)

– Pico Finance Loans:

– This must be a registered legal entity in the form of a Thai limited partnership.

– There must also be paid-up capital of at least 5 million baht.

– The managing partners and for that matter all partners must upright people*.

* They must not be unrehabilitated insolvents, criminals or dishonest people.

– Pico Plus Loans:

– This too must be a legal entity in the form of a limited partnership.

– It has to have have paid-up capital of more than 10 million baht.

– Managing partners and all partners must not have any prohibited characteristics*.

* They must not be unrehabilitated insolvents, criminals or dishonest people.

You will note the difference between the Standard license and the Plus license that both must be registered partnerships. The only difference is the amount of paid-up capital. This as seen above will also tell you what their maximum loans can be. The Plus license can have a credit limit of up to 100,000 per person. Likewise you will also note that most of the microloans in Thailand tend to be for loans longer than 3 months.

Submitting an Application:

Note that applications can be submitted to the FPO, Provincial Finance Office, Government Savings Bank, and BAAC throughout the country. Likewise the FPO will consider your application within 60 business days. This to see if it has been completed correctly. They will proceed to notify you within 7 days of completion.

Take proper legal advice from a lawyer in Thailand to ensure that all your documents are complete and accurate in order to avoid delays. Note that should there be corrections to be made. Then this must be made within the specified period. If not then the application will be considered abandoned.

Likewise by following these guidelines, interested parties such as yourself can request permission to operate a provincial-level microfinance business correctly and efficiently.

Service Locations

1. Public Financial System Development Policy Division

• Opening Hours: Open from Monday to Friday (except public holidays) from 08:30 – 16:30.

• Submission Methods:
– In person at: “Public Financial System Development Policy Division, Fiscal Policy Office, Ministry of Finance, Rama VI Road, Phaya Thai Subdistrict, Phaya Thai District, Bangkok 10400”

– By post

– Contact Information:
– Telephone: 0 2169 7130 to 36
– Hotline: 1359

2. Electronic Channels of FPO

– Availability: Open 24 hours a day.
– Submission Methods:
– By email in PDF format to: saraban@fpo.go.th
– Contact Information: For inquiries or confirmation of receipt during business hours, call 0 2273 9020 ext. 3124 or 3115.

3. Government Savings Bank, All Branches Nationwide

– Opening Hours: Monday to Friday (except public holidays) from 08:30 – 16:30 hrs.
– Submission Method: In person.

4. All BAAC Branches Nationwide

– Opening Hours: Monday to Friday (except public holidays) from 08:30 – 16:30 hrs.
– Submission Method: In person.

5. Provincial Treasury Offices in Every Province Nationwide

– Opening Hours: Monday to Friday (except public holidays) from 08:30 – 16:30 hrs.
– Submission Method: In person.

Procedures, Duration, and Responsible Work Sections

– Total Processing Time: 60 business days.

List of Documents and Supporting Evidence

1. Request for Permission to Operate a Provincial-level Microfinance Business Under Supervision (Partnership)

– Government Agency: FPO

– Form: Available for download at ———–