DIVIDEND POLICY FOR SMEs ENTREPRENEURS IN ECONOMIC CRISIS SITUATION

Abstract

World Economic Crisis has been an effect to Economic Crisis in Thailand from past to present time. These economic crises have a huge impact to Thai entrepreneurs especially SMEs entrepreneurs that has more than 90% of Thai entrepreneurs. These crises make a loss to SMEs entrepreneurs and has an impact to decrease return to equity (ROE) that come from unable to pay dividend. So in these crises, SMEs entrepreneurs must have a plan for dividend policy that will make a confident for its enterprises and shareholders.

Research studies on dividend payment in Thailand and other countries show that stock dividend is a good investment during economic crises especially in the long-term, stock dividend can pay return more than market return. Dividend yield from stock has a greater yield than longterm bond, treasury bill and money market instrument. So investment in stock dividend is a suitable and interesting for a medium-term and long-term investment during economic crises situation.

Dividend policies for SMEs entrepreneurs can be categorized in five approach ; 1) Regular Dividend Policy 2) Stable Dividend Policy 3) Irregular Dividend Policy 4) No Dividend Policy and 5) Medium-term and Long-term Contracted Dividend Policy, the new idea for SMEs entrepreneurs that cannot pay dividend during economic crisis but do not has a critical impact to stock price. This dividend policy has many advantages for SMEs entrepreneurs during economic crisis such as, decrease cash dividend for SMEs entrepreneurs, keep financial liquidity for SMEs entrepreneurs, SMEs entrepreneurs can use capital for another investments and Decrease shortterm debt.