Mega-fairs to help industry ride the storm

The Finance Ministry will organise "mega-trade fairs" in a bid to support state-owned banks and their clients in coping with economic turbulence, Finance Minister Surapong Suebwonglee said yesterday.

The first such event is expected to take place in Bangkok late next month or in early July, he said after meeting with executives of state-owned specialised financial institutions (SFIs).

He said the ministry intended to help small businesses and industries that were clients of the SFIs by providing a channel for them to sell products. Moreover, consumers will also be able to buy goods at reasonable prices.

Surapong said he did not direct SFIs to lend more, because more credit would not help in the current environment of high oil prices and a slowing world economy.

After the mega-trade fair in Bangkok, similar events will be held in other parts of the country.

Surapong said he had also asked the Treasury Department to allow small and medium-sized enterprises to use its buildings as market places.

The SFIs had combined outstanding loans of Bt1.63 trillion as of the end of March, up 5.6 per cent year on year.

Surapong said he would discuss the provision of soft loans with some SFIs after the government launched additional measures to encourage motorists to use natural gas for vehicles.

The government is now looking for fuel-tank producers that can supply products at cheaper prices.

The SFIs have also submitted plans to the ministry for reducing their non-performing loans (NPLs) over the next five years. The Bank for Agriculture and Agricultural Cooperatives plans to bring its NPLs down from 12 per cent of total loans to 6 per cent, while the Small and Medium Enterprise Development Bank of Thailand (SME Bank) intends to reduce its bad loans from 44 per cent of total loans to only 17 per cent.

Other SFIs are the Export-Import Bank of Thailand, the Government Savings Bank, the Government Housing Bank, Secondary Mortgage Corp, the Islamic Bank and Small Business Credit Guarantee Corp. While most make a profit, the SME Bank, Secondary Mortgage Corp and Small Business Credit Guarantee Corp are operating in the red.