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Published on March 6, 2008

BOT Assistant Governor Suchada Kirakul said exporters could no longer rely on baht depreciation to boost export revenues. Instead, they should become more efficient and sell value-added products. She said this was a good time for small and medium-sized enterprises to gear up their finances as the baht was strong, interest rates low and tax incentives have just been introduced.

SMEs can begin to invest and improve their production capacity although they wanted the public sector to help speed up the process.

Large companies, Suchada said, can obtain finance in a number of ways such as through bond issues.

"They have been hesitating to make capital investments for a long time but they want someone to take the lead. It is a good time while everything is [relatively] cheap," she said.

The BOT introduced 3-year soft loans worth of Bt40billion for SMEs last Friday. The central bank will lend commercial banks Bt20 billion at the minimum lending rate (MLR) minus 6.75 per cent. The banks will provide another Bt20 billion at MLR minus 2.25 per cent.

The scheme is on a first-come-first-served basis. The move is intended to reduce possible adverse effects on SMEs by the scrapping of capital controls such as a stronger baht. The central bank  also has a Bt4.5 billion project to help generate working capital for SMEs, and has allocated Bt500 million to help reduce the impact of the strengthening baht.

Anoma Srisukkasem

The Nation