The Small and Medium Enterprise Development Bank has been told to loan up to 60 per cent of damage or insurance coverage, whichever is lower, to businesses affected by the political riots in May.
Anchalee Vanichthepabutr, deputy secretary to the prime minister, said the measure is part of the Bt5billion approved by the Cabinet to aid the affected business sector.
Under the resolution passed yesterday by the committee chaired by PM's secretarygeneral Korbsak Sabhavasu, businesses which have insurance policies but have so far failed to get compensation will be eligible for the loans. The borrowing term is set at no more than five years. During this period, they will pay an interest rate set at three percentage points below minimum lending rate. In the first year, they are obliged to pay only the interest.
The committee also instructed the Finance Ministry to work out extra measures to help the business operators for submission to the Cabinet. It should also subsidise 2 percentage points of interest rate to the SME Bank throughout the project. The SME Bank's loan programme should also be separated from the normal banking business which entitle it to government compensation.
Of the 871 business operators suing their insurance firms for compensation, 68 per cent bought policies covering damage claims of Bt1 million to Bt5 million each, totalling Bt2.5 billion.