The Small and Medium Enterprise Development Bank of Thailand has approved Bt765 million in loans to help 257 logistics operators strength¬en their competitiveness ahead of industry liberalisation under the Asean Free Trade Agreement.
More than 380 SMEs have applied for loans worth Bt1.2 billion from the Logistics Business Development Fund, which expires in December.
Deputy Commerce Minister Alongkorn Ponlaboot has urged SMEs to improve their operations by asking for soft loans.
As logistics is one of four priority industries under the Asean Framework Agreement on Services that will be liberalised in 2015, shareholding limits in logistics companies in Asean will be raised. The logistics sector will be allowed to have foreign Asean stakes of up to 51 per cent in 2010 and 2011 and 70 per cent in 2013.
Under the fund, the government has designated a total of Bt3 billion for developing local logistics operators.
However, a portion of the budget has been used to help SMEs that suf¬fered from the political unrest as an immediate support measure.
The soft loans charge the minimum lending rate minus 3 percentage points and offer a oneyear grace period.
"Still, few enterprises, accounting for 25 per cent of the total budget of the fund, have asked for a soft loan. Enterprises should rapidly develop their business before liberalisation so that they can compete with foreign enterprises," Alongkorn said.
According to the Business Development Department, the Bt736 billion logistics industry, with 17,335 operators, accounts for 3.5 per cent of gross domestic product.
However, the logistics burden in Thailand is still high, at 19 per cent of total production costs.