Industrial bodies to petition PM

The results of today's regular meeting of the three powerful associations will be submitted at the next joint public-private meeting chaired by Prime Minister Abhisit Vejjajiva to help solve the problems facing private enterprises.

Komson Opassathavorn, vice chairman of the Board of Trade and the Thai Chamber of Commerce, said two proposals would be submitted at the meeting with the premier.

The first would call on the government to ask the Export-Import Bank of Thailand (EximBank) to relax its conditions in order to ease access to the government's Bt5 billion in soft loans.

"Although the government allocated a special budget to help exporters, SMEs in all sectors have faced difficulty obtaining bank loans because of the banks' stringent conditions," Komson said.

A discussion with hotel operators had convinced him that very few borrowers can meet the strict conditions for accessing the soft loans, he said.

The BoT is conducting a survey to determine how many enterprises won approval from banks to access the loans this year, he said.

Komson called on EximBank to approve export guarantees for exporters who have purchase orders from their buyers. SMEs should be able to use the export-guarantee documents as certification for obtaining loans from commercial banks, he said.

Since the global economic downturn, commercial banks have approved fewer loans for enterprises, in particular SMEs, despite their having been loyal clients for five to 10 years, in most cases. The government should persuade commercial banks to relax their conditions for approving loans for SMEs, Komson said. Without more financial liquidity, many SMEs could easily go bankrupt, he said. The second proposal would ask the government to closely monitor the baht's movements and stabilise the currency in line with those of the Kingdom's export competitors. The baht has appreciated at least 3 per cent more than the currencies of trade competitors such as Vietnam and India.

According to a recent report by the Office of Small and Medium Enterprise Promotion, the portion of Thailand's economy represented by SMEs is expected to shrink 1.4 per cent this year as a result of the slump in exports to major markets such as the US and Japan. However, SMEs are expected to see growth resume next year at a rate of 2.6 per cent over this year, the office said.