Clear economic path, functioning govt lift mood
The Thai Bankers’ Association hopes loan growth in the banking industry can resume its double-digit pace after the National Council for Peace and Order charts a clear economic path and a functioning government is formed.
Chairman Boontuck Wungcharoen said after the monthly meeting of the Joint Standing Committee on Commerce, Industry and Banking yesterday that loan growth in the banking industry is likely to return to 10 per cent from the expected 6-8 per cent if the government can push for the Board of Investment’s (BoI) approvals of 400 projects worth Bt70 billion currently under the its consideration. The BoI can only look into these projects once its new board of directors has been appointed.
Those projects will benefit investment in Thailand and supply-chain businesses as well as small and medium-sized enterprises.
Bank lending will also gain from the investment.
The NCPO gives importance to some policies that help shore up the economy immediately such as to pay farmers for their pledged rice and to construct mass transit lines.
Both policies can be supported by the banking industry.
“Loans might not rise sharply this year but what we are seeing is a more stable economy, not the shrinking of the past months,” he said.
SMEs will be the first to benefit from the positive signs and SMEs are a key driver of the economy because some 80 per cent of employment comes from them.
The Joint Standing Committee will submit an urgent agenda to the NCPO, focusing on helping SMEs, stimulating the economy and restoring confidence.
The committee will propose to the NCPO to allocate a special budget of Bt4 billion-Bt5 billion to the Thai Credit Guarantee Corporation to guarantee up to 50 per cent of SME loans instead of the current maximum of 18 per cent.
This will help reassure banks in giving loan to SMEs that are suffering from tight cashflow, he said.
Suphan Mongkulsuthee, chairman of the Federation of Thai Industries, said the
private sector plans to organise events and invite foreign investors to attend them in a bid to restore their confidence.
The FTI will propose the “Made in Thailand” project to the NCPO by including in the terms of reference that any product that uses raw materials from Thailand must be favoured by state agencies or private companies.