The move comes after 2,000 operators in the sector were forced to shut down in the first two months of the year.

Director-general Jhitraporn Techacharn said last week that 2,000 consultants would help small and medium-sized enterprises that are still in business to draw up strategies and find appropriate markets.

She said the main reason why SMEs were unsuccessful was that they did not know how to create products that met demand in the market.

Most of the folded operators were involved in sectors such as drinks, sugar, instant noodles, leather, textiles and garments. Operators in the service sector have run smoothly, with the exception of the spa and beauty businesses.

Part of the budget will be used to set up training centres to encourage businesses to create more innovative products for penetrating markets locally and internationally.

According to the Osmep survey, about 95 per cent of new enterprises end in failure.

However, consultants and training centres should reduce the failure rate to 55 per cent.

Although SMEs have faced various risks, Osmep still estimates that the number of operators will increase by 5.5 per cent from last year.

If operators set strategies to handle the baht's appreciation, the value of the SME sector will rise 21.5 per cent from Bt329 billion last year, Jhitraporn added.

Pramode Vidtayasuk, director-general of the Department of Industrial Promotion, said the government budget for promoting small businesses would be raised to Bt5 billion next year from Bt3 billion this year.

He said the Industry Ministry found that SMEs were poor at basic management.

Therefore, a good deal of the supporting funds will go towards developing specialists who could analyse these problems .

Meanwhile, the SME Development Bank of Thailand is granting loans at the minimum lending rate (MLR) minus one per cent to premium customers, according to president Pongsak Chewcharat.

Many enterprises have a high level of bad debts due to the economic slowdown and political turmoil since the second half of last year.

Pongsak said the low rate would help operators who have non-performing loans by extending their period of debt restructuring and providing them with new credit.

Chalida Ekvitthayavechnukul

The Nation