Pair of credit guarantee programmes targets SMEs
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THAI CREDIT Guarantee Cor-poration (TCG) is ready to guarantee loans for small and medium-size enterprises after the Cabinet approved two economy-boosting initiatives - the portfolio guarantee scheme (PGS) and the policy loan scheme.
“The PGS and the policy loan scheme approved by the Cabinet on Tuesday will boost new loans for SMEs to more than Bt100 billion this year,” TCG president Vallobh Tejapaibul said yesterday after a seminar on guaranteed loans for SMEs and the country’s economic recovery.
The two programmes had been introduced earlier. The latest round is the fifth stage backed by a budget of Bt240 billion. The guarantee fee is 1.75 per cent annually.
Of the Bt240-billion budget, Bt50 billion will help lower the amount that SMEs have to pay for the guarantee from commercial banks.
Meanwhile, policy loans will be extended by the Small and Medium Enterprise Development Bank under a Bt15-billion budget. The five-year loans will only be offered to new customers and not those seeking to refinance debts from other financial institutions.
SME borrowers will pay 4-per-cent interest per annum for the first three years but the rate for the fourth and fifth years will be set according to the SME Bank’s rate at the time.
The Finance Ministry will pay for the difference to compensate the lenders.
Government subsidies
The maximum loan for one SME debtor is Bt40 million. The ministry will subsidise the full guarantee fee in the first year and pay for 0.75 per cent of the guarantee fee in the second and third years. SMEs will have to pay the full guarantee fee in the fourth and fifth years.
As of Tuesday, the TCG had guaranteed Bt37 billion in loans |to 20,338 SMEs so far this year |out of its Bt80-billion full-year target.
“We are confident the latest measure will speed up com-|mercial-bank loans for SMEs |and help boost the country’s economy through next year,” Vallobh said.
