THURSDAY, March 28, 2024
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Ohec provides seed money plus advice for students with bright ideas

Ohec provides seed money plus advice for students with bright ideas

It's often difficult for young people to start new businesses without solid collateral, but thanks to a loan programme initiated by the Office of Higher Education Commission, a young alumnus from Kasetsart University has seen his coin-operated Wi-Fi route

Chalermlab Sakdaprecha has much praise for the government’s planned Seed Money Fund project. With a Bt5 billion budget for its first year, he believes it is set to turn a great number of young people into entrepreneurs.
 “Without a loan, I would have lost a very good opportunity to expand my business,” said Chalermlab, who is founder and owner of the Hurricane Wi-Fi brand.
“My company faced a capital shortage during the first year when I was a third year KU student. Our dealers ordered more coin-operated Wi-Fi routers but we were unable to produce them because we did not have enough money and the bank turned down our request for a loan,” he said.
Chalermlab plans to submit a request for a loan from the new
Seed Money Fund project as he will not be required to show assets to guarantee any potential payment
of debts. Instead, the Seed Money Fund will award loans to students based on their business plans,
however, careful vetting and strict monetary criteria will ensure only the most innovative business proposals will secure a Seed Money Fund loan.
“The project is bringing more business opportunities to young people in vocational and higher education, enabling them to fulfil their dreams of becoming entrepreneurs,” said Assoc Prof Kamjorn Tatiyakavee, MD, deputy secretary general at the Office of the Higher Education Commission (Ohec).
From July onwards, the project’s first batch of young entrepreneurs will be able to start up their businesses, he added. Between August and October, the next batch will then be trained on how to write a feasible business plan, before they proceed to the vetting and approval stage.
 “Please don’t fear business failure as it’s very common – I have already failed three times in business. You should see this as a great opportunity,” Chalermlab recently told a group of young people setting up their own businesses.
“The government plans to hand out soft loans to at least 5,000 new-generation entrepreneurs yearly,” Olarn Chaipravat, who chairs the Seed Money Fund’s board said, adding that 500 lecturers and teachers would be trained to teach an entrepreneurship course offered to more than 25,000 students nationwide each year.
The Cabinet agreed on July 30, 2012 to set up the fund. It has budgeted Bt5 billion for the project’s first year (2013) and the same amount for next year. It plans to increase that amount to Bt10 billion in 2015 and Bt20 billion in 2016, according to Ohec.
In a bid to ensure fair loan approvals and prevent potential losses, the project will use Authorised Business Incubators (ABIs) to screen each student’s business plan before allowing its approval. Once approval is granted, students will have access to business experts from the private sector to mentor them on the project’s development, said Assoc Prof Kamjorn Tatiyakavee, MD, deputy secretary general at Ohec.
“Each ABI committee comprises seven experts from different agencies, including trained lecturers, teachers, and business experts from the private sector – including the banking industry,” Olarn said.
“The committee will use criteria used by the banking sector in order to assess the feasibility of each proposed business plan. Doing so will help the fund reduce the risk of providing loans to students or new graduates with poorly executed proposals,” Kamjorn said.
Olarn said a maximum loan of Bt3 million would be given to each borrower – Bt2 million from banks involved in the project and Bt1 million from the fund.
“As the banks are providing a higher percentage of the loan, they will use their own financial criteria, which means the risk of non-performing loans should be quite low,” Kamjorn added.
The Seed Money Fund project currently has 14 ABIs at its disposal – nine of which are located in universities and four at vocational colleges. More ABIs will be established to reach out to students –upgraded from university and vocational college business incubators.
To ensure the Seed Money Fund project benefits student entrepreneurs, Chalermlab urged the government to provide clear information on the project’s timeline – from writing a business plan to the loan approval.
He said unnecessary regulations could delay loan approvals and should be removed. The project should also assist students by providing them with access to successful entrepreneurs who began as students.
In addition, Chalermlab said the Seed Money Fund should not focus solely on the fiscal aspects of business proposals submitted by students, but must also look at the innovative aspects of their proposals as these could play an important part in achieving success.

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