The Finance Ministry has approved a budget of 100 billion baht for soft loans to assist small and medium enterprises in light of more difficult credit conditions and the poor economic outlook.
“SMEs are the first ones to face difficulties in times of business hardship, especially access to sources of funds as banks are stricter with loan approvals amid fears of a global economic slowdown,” Deputy Finance Minister Pradit Phataraprasit said yesterday.
Mr Pradit said cabinet approval would be sought for the programme on Dec 9 and the ministry hoped to officially announce the package by Dec 15.
He said the budget of 100 billion baht was expected to be injected into the credit market for SMEs, with 50 billion to be provided by the SME Bank and the rest by commercial banks.Pongpanu Svetarundra, the SME Bank chairman, said the state bank planned to provide 50 billion baht worth of loans into two tiers.
“One tier worth 40 billion baht raised through bond issues will be allocated to provide soft loans to SMEs, with a low interest charge at 3 percent, of which 50 percent of the interest or 1.5 points will be covered by the bank,” Mr Pongpanu said.
This measure will cost the Finance Ministry 750 million baht yearly.
Another 10 billion baht will be set aside for lending to members of the Federation of Thai Industries (FTI) at normal rates to help members, who face cashflow difficulties.
“We have received calls for help from our members who say that banks have been tough on loan granting, so we hope this 10 billion baht from the SME Bank will ease our members’ problems a little,” said FTI chairman Santi Vilassakdanont.
The FTI and the SME Bank signed a memorandum of understanding yesterday on the SME loan collaboration and hope to be able to start accepting applications next month.
Mr Pradit said he was also hopeful of co-operation from commercial banks to commit another 50 billion baht apart from the state budget.
“The SME Bank’s credit guarantee unit, formerly known as the Small Business Credit Guarantee Corp, will provide credit guarantees for these loans, so I am confident that with this backup, commercial banks will be more confident in SMEs,” he said.
While he is not certain if the 100 billion baht will be sufficient to overcome credit hardships, the ministry is also prepared to seek additional loans from the Japan Bank for International Co-operation (JBIC) to help provide loans through commercial banks. Pongpanu Svetarundra, the SME Bank chairman, said the state bank planned to provide 50 billion baht worth of loans into two tiers.
“One tier worth 40 billion baht raised through bond issues will be allocated to provide soft loans to SMEs, with a low interest charge at 3 percent, of which 50 percent of the interest or 1.5 points will be covered by the bank,” Mr Pongpanu said.
This measure will cost the Finance Ministry 750 million baht yearly.
Another 10 billion baht will be set aside for lending to members of the Federation of Thai Industries (FTI) at normal rates to help members, who face cashflow difficulties.
“We have received calls for help from our members who say that banks have been tough on loan granting, so we hope this 10 billion baht from the SME Bank will ease our members’ problems a little,” said FTI chairman Santi Vilassakdanont.
The FTI and the SME Bank signed a memorandum of understanding yesterday on the SME loan collaboration and hope to be able to start accepting applications next month.
Mr Pradit said he was also hopeful of co-operation from commercial banks to commit another 50 billion baht apart from the state budget.
“The SME Bank’s credit guarantee unit, formerly known as the Small Business Credit Guarantee Corp, will provide credit guarantees for these loans, so I am confident that with this backup, commercial banks will be more confident in SMEs,” he said.
While he is not certain if the 100 billion baht will be sufficient to overcome credit hardships, the ministry is also prepared to seek additional loans from the Japan Bank for International Co-operation (JBIC) to help provide loans through commercial banks.
*source-TMCnet – USA
