Tourism businesses stand to gain most from govt portfolio scheme

The state-owned Small Business Credit Guarantee Corp (SBCG) yesterday signed agreements with 16 commercial banks to provide Bt30 billion worth of credit guarantees for SMEs via banks. It believes the scheme could lead banks to lend up to Bt300 billion.

Finance Minister Korn Chatikavanij said the government had to step in to take the risk for the SMEs amid the global financial and economic crises.

He expects the portfolio-guarantee scheme to be fully used within six months.

Under it, the SBCG will agree with each bank to provide between Bt1 billion and Bt5 billion worth of portfolio guarantees. The period of guarantee is five years, and the SBCG charges banks 1.75 per cent of the amount it guarantees. It promises to approve bank requests for guarantees within three to five days.

The SBCG estimates 15,000 enterprises and 300,000 labourers will benefit from the scheme.

Each applicant will receive a guarantee of up to Bt20 million from the SBCG.

Those failing to repay the loans within 12 months but whose businesses remains viable will receive a guarantee of up to Bt10 million.

SBCG president Taveesak Foongkiatcharoen said tourism businesses, particularly tour-operators, hotels and related businesses, would benefit the most from the scheme, due to the lower rates and guarantee fees.

"The SBCG charges a guarantee fee of only 0.25 per cent, lower than the standard 1.75 per cent, and the Small and Medium Enterprise Development Bank of Thailand will also charge lower lending rates," he said.

Korn emphasised that the tourism industry had suffered from a disruption in cash flow due to the global economic downturn and the closure of Bangkok's two airports late last year.

Siam Commercial Bank executive vice president Vivat Kittiphongkosol said credits under this scheme would help SMEs better manage their working capital and cash flows. He also suggested SMEs reduce their inventories and collect payment on their bills more quickly in order to cope with the turmoil.

Bangkok Bank president Chartsiri Sophonpanich said his bank would provide loans to exporters and other SMEs.

Kasikornbank president Prasarn Trairatvorakul said his bank had long cooperated with the SBCG and would provide loans to those whose businesses showed potential but had inadequate loan collateral.