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Published on August 4, 2007

The Bank of Thailand yesterday announced soft-loan rates for small- and medium-sized enterprises affected by baht appreciation and those with serious liquidity problems.

Interest rates were set at minimum lending rate minus 2.25 per cent and plus one per cent, respectively, for the two types of SME. The rates took effect immediately.

The central bank's announcement is part of the SME Fund it has developed, with a joint committee helping exporters in trouble because of the strong baht.

Commercial banks and the central bank will each contribute half of the Bt4.5 billion that will be lent at minimum lending rate minus 2.25 per cent for currency-troubled companies.

Another Bt500 million is available to ease liquidity. This will cost minimum lending rate plus one per cent. Ninety per cent of this fund comes from the central bank and the rest from commercial banks.

The assistance period for the soft loans is three years.

Each company will be limited to a maximum of Bt5 million. Those needing more will have to approach commercial banks for normal loans.

The SME Fund is one of six measures approved last week. Another involves the promotion of companies' overseas.

Deputy Prime Minister and Industry Minister Kosit Panpiemras said on Monday that the government's economic steering committee would discuss guidelines for overseas promotion.

On instruments to stem baht appreciation, he said there was no need for additional measures unless irregularities appeared.

He said the government and agencies would wait to see how the current assistance worked before considering alternatives.

Anoma Srisukkasem

The Nation