Short-term loans for SMEs hit by minimum wage hike

Prasert said that the government had agreed to the project, which aims to help SMEs impacted by the minimum wage increase to Bt300 per day. Under the financial scheme, a one-year loan with 3 per cent interest would be granted to SMEs to use for short-term capital flow and to improve their liquidity. A maximum of Bt1 million will be granted for each loan. Prasert said that the project would give local SMEs a year to adjust and change their cost structure. 

The loans would be available through seven government and private financial institutions, comprising the Krungthai Bank, Government Savings Bank, Small and Medium Enterprise Development Bank of Thailand (SME Bank), KasikornThai Bank, Bangkok Bank, Bank of Ayudhya, and Siam Commercial Bank, with a total budget of Bt193 million. More than 6,300 individual SMEs are expected to apply for the low-interest loan.

“The measures will help SMEs involved in the production, commercial and service sectors, especially those in the North, Northeast, and Southern parts of the Kingdom where there is a greater use of labourers,” said Prasert. He added that 12 business groups in 51 provinces had been forced to adjust their minimum wages by more than 20 per cent. 

Chawan Svasti-xuto, deputy director-general, acting on behalf of the director-general of the OSMEP, said that the measure’s objective was to reduce the short-term cost burden for those SMEs in the production process. The measure would also provide new opportunities for SMEs by enabling them to manage their operational costs more effectively, while maintaining conditions of employment.