State-owned banks launch joint SME loan initiative

Economy August 24, 2017 01:00

By SOMLUCK SRIMALEE
THE NATION

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THREE state-owned banks – Krungthai Bank, Government Savings Bank, and Small and Medium Enterprise Development Bank – in collaboration with Thai Credit Guarantee Corporation will together provide loans totalling Bt31.5 billion to small and medium-sized enterprises (SMEs), exempting the SMEs from paying the loan guarantee fee of 7 per cent for the first four years.



This is a part of the loan guarantee programme worth Bt81 billion approved by the Cabinet on August 11. 

The government and commercial banks who join this programme will together pay the loan-guarantee fee to the Thai Credit Guarantee Corporation. This fee is normally paid by the SME seeking the loan. The government will pay 4 per cent, while commercial banks who join the programme, will pay the balance 3 per cent. The scheme will be valid until June 30, 2018.

“This programme aims to provide loans to some 27,000 SMEs, with combined loans of Bt136 billion, and it is expected to create 108,000 jobs. This move is expected to generate cash flow of up to Bt371 billion in the country,” Thai Credit Guarantee Corporation (TCG) president Nitid Manoonporn said at press conference with the three state-owned banks yesterday.

He added that TCG is collaborating with both state banks and commercial banks to provide loans to SMEs under this programme. State-owned Government Savings Bank (GSB) will provide loans worth Bt12 billion, Krungthai Bank will provide Bt12 billion, and Small and Medium Enterprise Development Bank would provide Bt7.5 billion.

“We aim to provide loans to SMEs under this programme within this year although the campaign will end on June 30, 2018,” GSB president and chief executive officer Chatchai Payuhanaveechai said at the same press conference yesterday.

Chatchai said the bank had already designed a loan programme of Bt5 billion for SMEs who need cash flow for liquidity. The programme will provide funds to those SMEs that have got contracts from customers but are yet to receive any payments. They will also be exempted from the loan guarantee charge for the first four years.

Normally, suppliers offer a credit time of 60 to 90 days to get the money after delivering products to their supply chain or the public and private sector. This often causes liquidity headaches for SMEs. This loan will help them to acquire enough liquidity to continue their business, Chatchai explained.

He added that this loan plan is a part of the Bt12-billion loans that the bank will provide under the programme without a loan guarantee charge for the first four years. Krungthai Bank president Payong Srivanich said the bank would provide loans totalling Bt12 billion under this programme at a special interest rate of 6 per cent. 

“We aim to approve loans of Bt12 billion under this programme by the end of this year,” he said.

SME Development Bank president Mongkon Leelatham added that the bank will provide loans totalling Bt7.5 billion to tourism business, the tourism community, and related businesses nationwide. It aims to approve all loans under this programme by the end of this year in order to facilitate recovery of the country’s grass roots economy.