Measures to boost private investment and job creation are expected to follow soon.

Prime Minister Surayud Chulanont's interim government is facing growing public discontent over the economic slowdown as a result of sagging investors' and consumers' confidence.

The stimulus money will be distributed through staterun banks.

"Four stateowned banks plan to make new loans under the stimulus package worth Bt44.04 billion," Finance Minister Chalongphob Sussangkarn told a press conference after he met with executives from the Government Savings Bank (GSB), Government Housing Bank (GHB), Small and Medium Enterprise Development Bank of Thailand (SME Bank) and Bank for Agriculture and Agricultural Cooperatives (BAAC).

The GSB plans to launch loan schemes worth Bt15.7 billion.

Directorgeneral Goanpot Asvinvichit said it would offer lowincome borrowers Bt5,000 each in order to prevent them using loan sharks, targeting 300,000 clients nationwide.

It will also provide loans for community enterprises worth about Bt1 billion.

Premium clients will also be offered more loans, while the bank will expand loans under its People's Bank scheme and for civil servants.

The GSB package will be launched at Money Expo 2007 in Bangkok from May 1013. The loans will be available at its branches from May 14.

GHB president Khan Prachuabmoh said it would offer mortgage loans of less than Bt1 million with a threeyear fixed rate of 4.99 per cent, down from 6 per cent.

Khan said the bank would coordinate with local authorities to provide housing loans for people upcountry on properties worth between Bt250,000 and Bt350,000. Buyers can also borrow about Bt300,000 if they want to build a house.

The GHB will increase its loans target to Bt95.5 billion this year from the previous figure of Bt90 billion, he added. New lending will start on May 8.

 BAAC president Thirapong Tangthirasunan said it would increase new lending by Bt18.84 billion from its previous target. The new loans will target farmers who participate in biodiesel projects, small entrepreneurs, community enterprises and environment conservation.

SME Bank president Pongsak Chewcharat said his bank would offer Bt4 billion of new loans in addition to its previous target of Bt31.5 billion.

Bt1 billion will go towards rehabilitation of nonperforming borrowers and Bt2 billion is earmarked for highly rated customers who repaid loans in the past 12 months without default. The bank will reduce its interest rate for premium clients by 0.25 per cent to 1 per cent.

Chalongphob said that with new loans, these four key banks would have combined lending worth Bt466.04 billion.

Critics have predicted that state banks could not lend as they planned because lowincome groups have high debts accumulated through populist policies initiated by the Thaksin government. However, Chalongphob said the SME Bank and Deputy Prime Minister Paiboon Wattanasiritham had tried to restructure debts for them.

Chalongphob also said he was considering more fiscal measures to boost property and other sectors, but ruled out cutting housing transaction fees. Meanwhile, an informed source said new measures would also encourage investment in the machinery sector in order to boost private investment.

Chalongphob could not give an assurance that economic growth would be more than 4 per cent this year and he conceded that confidence had been affected by political uncertainty.

The Finance Ministry is also consulting with key ministries to launch projects to create jobs.

by Wichit Chaitrong

The Nation