IFC lends $100mn through TMB Bank
The International Finance Corporation (IFC), a member of the World Bank Group, and TMB Bank have reached an agreement to cooperate in a joint effort to support SME exporters in Thailand with a long-term financing program worth in total US$100 million.
The cooperation with TMB marks the first time IFC grants loans aimed at flood relief to target recipients through a Thai commercial bank. With this collaboration, IFC and TMB aim at increasing lending to small and medium enterprises and exporters mostly affected by last year’s floods, helping them revive their businesses and create jobs at a time when US dollar liquidity is tightening. TMB will distribute the fund to target customers under the “TMB Long-term USD Loan for SME Exporters” programme in order to support the Thai export economy which rebounded strongly in the first quarter after shrinking late last year because of the floods
“IFC’s support to TMB reflects our countercyclical role in helping address financing gaps for small and medium enterprises,” said Karin Finkelston, IFC Vice President for Asia Pacific. “As a leading bank in Thailand with a strategic focus on small companies, our partnership with TMB will deliver critical support for these businesses amid challenging global market conditions, helping them grow, create jobs, and sustain the economic recovery.”
Boontuck Wungcharoen, TMB CEO, said that the bank will distribute the IFC fund to SMEs who have US dollar denominated in-flows; providing them with access to long-term US dollar funding to either import new equipments as part of their flood rehabilitation plans or expand their production capacity.
"This is a rarity for SMEs in Thailand. Under the ‘TMB Long-term USD Loan for Exporters’ programme, SMEs will also be able to naturally hedge their loan repayments by using their US Dollar income to repay the US Dollar-denominated loans…thus saving hedging costs and stabilizing forex volatility. Lastly, SMEs will realise the benefit of having a structured loan that
leverages a fixed interest rate that allows the customer to have greater control in managing their cost of fund. This will be especially beneficial with the increasing interest rate trends that are happening," Boontuck said.
Eligible borrowers can repay the loans within 3-5 years, at fixed Interest rate of 4.9 per cent per annum for a minimum credit line of $1 million. The special interest rate is being offered until June 30..
