ACBAssets Capitalization Bureau

(Public Organization)

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Framework for Assets Capitalization

The Wealth of the Nation

Create employment / Create producers /

Create Income

The People

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• Established 3 June 2003

• Vision

“Promote the development of appropriate, comprehensive, and efficient asset capitalization systems.”

• Concept:

Promote development projects that enable producers to enhance the value of their assets.

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Board

Executive Committee

Office of the Committee for Assets Capitalization Administration

Assets Capitalization Bureau Mr. Natee Klibtong

Director General & CEO

Minister in Charge

Training &Public Relations Unit

Information & Data Unit

Administration Unit

Policy &Legal Unit

Planning Unit

Secretariat

Deputy Director - General

Internal Auditing Unit

Deputy Director - General

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■ Responsibilities

Create opportunities to access institutional sources of capital

Establish a system of ownership

and validation

Negotiate agreements with financial institutions

Develop assets valuation procedures and Value Creation

Develop an assets capitalization process

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Categories of Assets for Capitalization

1. Land and land based property

2. Rental & Leasing contracts

Types of Assets

5. Machinery

4. Intellectual Property

3. Documents authorizing use

of public facilities and other permits

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Categories of Assets

1. Land & Land – based assets

Agricultural Land Reform: Land document no. 4-01

Department of Cooperatives Promotion Land document no. 3

Department of Social Development and Welfare: Land settlement document no. 1

Department of Land: Document numbers NS-2, SK-1, and restricted land title deeds

Department of Agriculture: Document no. KYT-1

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Categories of Assets

2. Rental Contracts

•Rental Contracts for Treasury Department Lands

• Rental contracts for National Housing Authority buildings

• Rental contracts for Bangkok Metropolitan Administration market space

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Categories of Assets

3. Documents authorizing use of public facilities and other permits

Permit from the National Parks Department to produce in a national park

Permit/Authorization to conduct aquaculture in public waters (Seafood Bank Project)

Permit to use public land granted by the Department of Local Administration

Contract authorizing the use of public lands in self-help land settlements of the Department of Social Development and Welfare

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Categories of Assets

4. Intellectual Property

Patent/Trademark

(Department of Intellectual Property)

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Categories of Assets

5. Machinery Machinery registration documents

(Department of Industrial Works)

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Process of Accessing Capital Using 5 Categories of Assets Conditions for Accessing Funds from Financial Institutions

Validation agency issues a certificate to credit applicant

Memorandum of Understanding between the ACB, Agency with Authority over the Assets,

and Financial Institutions

Agency with authority over the assets issues a permit for use of assets or other document

authorizing use and has the permit registered

Client applies for credit from a financial institution

Criteria for considering credit applications

- Qualifications/credit record

- Project/Income generating activity

- Assets used as collateral

Bank approval of credit & credit agreement between the client & bank

Bank informs concerned agencies to record the transaction

Normal repayment

Case of non-repayment

Bank informs the concerned agencies

Negotiations and out-of-court settlement

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Results January 2004 – September 2005

Accelerated the issuing of land documents 2,214,548 issued Credit Applicants 205,471 applied Applications approved 198,166 approvals Credit approved 15,319.28 million

baht Value of land assets used as collateral 1,298.67 million baht

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Obstacles to Implementation & Guidelines for their Resolution

1. Problem of asset ownership

• Lack of understanding methods of accessing capital

– Must have an intensive public relations campaign

– Establish a database system to ensure accurate information

– Establish a network of development partners in every region

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Obstacles to Implementation & Guidelines for their Resolution

1. Problem of asset ownership

• Lacking the capacity to invest for occupational development.

– Training: Incubate to enhance administrative and management capability

– Identify development partners to upgrade technical capacity

– Monitor to provide advice and recommendations

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Obstacles to Implementation & Guidelines for their Resolution

2. Institutional constraints among financial institutions

• Lack of understanding by operations personnel of the purpose and appropriate guidelines for implementation of assets capitalization

– Improved coordination and generally inform about recommendations

– Establish channels of communication for receiving regularly updated information

– Establish a support network

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Obstacles to Implementation & Guidelines for their Resolution

3. Obstacles to developing the assets capitalization system

• Movable assets have a lower value and are not generally accepted by financial institutions– Formulate supplementary measures for

accessing financial resources– Value Creation

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Obstacles to Implementation & Guidelines for their Resolution

3. Obstacles to developing the assets capitalization system

• Obstacles to valuing intellectual property– Establish a special working group to consider

determining the value of intellectual property – Methods of resolving non – performing loans

through out-of-court settlements remain unclear– Additional research is needed on a clearing house

systems

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Guidelines for the Future

• Expand the categories of assets • Increase the value of assets• Expand the network• Develop mobile units• Monitor and develop people in project areas• Increase the number financial institutions• Expand knowledge• Focus on target groups / pilot projects

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Existing Assets for Expansion

• Land PS 23/STK/Land Use Permit• Intellectual Property Geographic Indicator / Local Wisdom / Social and

Cultural Heritage• Rental/lease rights

Crown Property Lands• Permits

Public Lands of the Land Department• Machinery

Agricultural equipment

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Potential New Assets

Fishing boats ,tour boats, tourist rafts, house raftsGuide PermitsCertificate of Traditional Thai MedicineVehicle / boat registrationProduct quality standardsQuotaEducational degreesOccupational / Professional degreesEmployment Contracts / Procurement & Sales

Contracts

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Networking

State agencies and concerned financial institutions Sub-district administrative organizations Non-formal Education Centers Vocational education institutes Universities Sub-district community development officers Sufficiency Economy Learning Centers Youth groups Community-based / civil society organizations Technical specialists Project beneficiary groups

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Public Agencies Supporting ACB

Ministry of Agriculture and Cooperatives– Agricultural Land Reform Office– Department of Agricultural Extension– Rubber Estate Organization– Department of Agriculture– Office of the Rubber Replanting Aid Fund

Ministry of Industry– Office of the Permanent Secretary– Department of Industrial Works

Ministry of Social Development and Human Security– Department of Social Development and Welfare– National Housing Authority

Ministry of Interior Land Department– Community Development Department– Department of Local Administration – Bangkok Metropolitan administration

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Public Agencies Supporting ACB

Ministry of Natural Resources and Environment– Royal Forest Department– National Park Wildlife and Plant Conservation

Department Ministry of Justice

Department of Corrections Ministry of Information and Communication Technology

– Office of Information and Communication Technology Ministry of Finance

– Treasury Department

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Public Agencies Supporting ACB

Ministry of Commerce– Department of Intellectual Property

Ministry of Transport– Marine Department

Ministry of EducationRajabhat University/Chang Mai University/Maejo University/Sukhothai Thammathirat Open University/Mae Fah Luang University/Rajabhat Chang Mai University/Vocational Education Institutes/Non-formal Education Centers

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Public Agencies Supporting ACB

Thai Fishing Boat AssociationMarine Police

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Participating Financial Institutions

• Bank for Agriculture and Agricultural Cooperatives• Government Savings Bank• SME Bank• Thai Housing Bank• Krung Thai Bank• Islamic Bank of Thailand• Krung Thai Islamic Bank• Bangkok Bank• Thai Military Bank• Bank of Ayudhya• Thai Bank• Nakhon Luang Bank• Thanachat Bank• Siam Commercial Bank

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Important Projects /Activities

• Monitoring of ACB beneficiaries• Asset capitalization for the “Incubated

Enterprises Project”• Assistance to the poor and underprivileged• Asset capitalization of intellectual property• Promotion of organic agriculture as an asset• Asset capitalization of energy conservation

projects• Asset capitalization for Sufficiency Economy• Asset capitalization for vocational education

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Important Projects /Activities

• Asset capitalization based on Islamic characteristics

• Asset capitalization in artistic circles• Asset capitalization for provincial festivals• Asset capitalization in the Bangkok Metropolitan

Area• Asset capitalization for special projects• Conducting public seminars• Conducting international meetings• Central database for asset capitalization

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Afterthoughts

ACB is not a pawn shop Aim for a knowledge based society Lead the country in the Thai way Aim for a moral society

The End

Thank you

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Professor Natee KlibthongDirector-General & Chief Executive Officer

Assets Capitalization Bureau

Office of the Prime Minister

Building 41, Government House

Phitsanulok Road, Dusit

Bangkok 10300, Thailand

Tel. (+66) (0) 2629-9222Email: natee@plangsinsap.or.th

zolaam@gmail.com