Soft-loan package set for cabinet on dec 9

The ministry, on behalf of the Bank of Thailand, will contribute Bt50 billion to the scheme, Deputy Finance Minister Pradit Patara-prasit told the Federation of Thai Industries yesterday.

Of that, Bt40 billion will go to general smaller businesses, and the remaining Bt10 billion to small and medium-sized enterprises in the South and members of the FTI, he said.

The interest rate for the Bt40-billion loans will be reduced from 3 per cent to 1.5 per cent, with the ministry also providing a subsidy for the interest rate to the tune of Bt751 million.

The ministry has had to come forward with the loan, as the central bank no longer has this role, following enactment of the amended Bank of Thailand Act.

The Small and Medium Enterprise Development Bank (SME Bank) and Small Business Credit Guarantee Corp will also be responsible for guaranteeing loans to SMEs, backed by a budget of Bt10 billion.

SME Bank is collaborating with the FTI in the SME Power project to strengthen SMEs by providing low-interest loans worth Bt20 billion until the end of next year.

Pradit said the ministry had consulted on the financial source for this soft-loan package with Deputy Prime Minister Olarn Chaipravat and Thai Bankers' Association chairman Apisak Tantiworawong.

They have not reached a conclusion but the government will accelerate approval of budget spending in January for disbursement into the economy in April.

Pongpanu Svetarundra, chairman of SME Bank, said the funds would come from bonds and promissory notes. If interest rates charged the SMEs were not lowered, the bank would seek help from the government for a budget of about Bt751 million.