Package to offer soft loans to SMEs

The Finance and Industry ministries, in collaboration with the private sector, are expected to launch a package of stimulus measures in 15 days aimed at bringing relief to small and medium-sized enterprises (SMEs) suffering from low financial liquidity.

The problems facing SMEs was raised as an urgent issue at yesterday's first informal meeting of the Public-Private Committee, chaired by Prime Minister Somchai Wongsawat.

The Joint Private Committee on Commerce, Industry and Banking proposed that the Finance Ministry create a special fund offering low-interest loans, in order to ensure an adequate cash flow for SME operators.

Originally, the committee asked the ministry to set up a Bt50-billion soft-loan fund with the lowest possible interest rate. It bore in mind the package of soft loans available in the three provinces of the deep South, which offer interest of 1.5 per cent.

Deputy Prime Minister Olarn Chaipravat said after yesterday's meeting that the government was worried SME operators would be unable to handle "the economic tsunami" resulting from a global economic meltdown.

"We expect this package to help SME operators get through the irregular economic crisis coming in the year ahead," he said.

Apart from the stimulus package for SMEs, roadshows will be organised to promote Thai exports in countries that are not expected to be hurt by the economic crisis, such as those in Latin America, some in Asia, including the Middle East, and Australia.

Olarn said because of both internal and external negative factors, export growth next year would be lower than this year. The roadshows will help maintain export growth and boost the number of foreign tourists.

"The roadshows will be led by the private sector, while the government will become a facilitator," he said.

Regarding concern in the private sector about capital outflows causing tighter financial liquidity in Thailand, Olarn said the country had sufficient capital reserves, but the main problem was figuring out how to increase the money circulating in the financial system.

"We launched measures to protect financial transactions last week. Our next step is to circulate money in the grass-roots economy and stimulate domestic consumption," he said.

He said the prime minister was paying most attention to accelerating development of the Southern Seaboard. This was different from the long-standing Eastern Seaboard development, because the southern plan will enhance the economy, society and education for southerners.