SME measures prompt praise for govt

The measures include increasing the Thai Credit Guarantee Corporation’s (TCG) budget by Bt50 billion, the policy loans offered by the Small and Medium Enterprise Development Bank of Thailand and the introduction of nano-finance.

"Those three measures have strengthened SMEs and increased the channels through which they can gain access to capital. The one that is most effective and was truly needed by SMEs is the policy loans," said ATSME president Penthip Pornchaded.

The government said increasing the TCG’s budget for loan guarantees was designed to increase the number of SMEs that received guaranteed support.

The soft-loan policy with a 4-per-cent interest rate and a budget of Bt15 billion was coined to help small enterprises with limited collateral, while the nano-finance scheme was introduced to help start-ups gain a foothold.

Penthip said the policy loans would help new SMEs, and the only criticism enterprises had about the measure was that only non-refinancers could gain access to a loan, but many operators who did not qualify for the loans needed finance to expand.

"There are many SMEs that are interested in the scheme but with the limit of Bt1 million per operator it means only around 15,000 SMEs will be supported by the scheme, assuming that all of them take out the maximum amount," she said.

There are about 2.7 million SMEs in Thailand and 70 per cent have problems gaining access to finance. SMEs account for 37 per cent of gross domestic product and employ 11 million people.

"The high demand means that the policy will not be able to support all the operators who are interested. But this is the first crucial step, and it is the first phase, as the government will probably wait for the response from the private sector before moving into Phase 2," she said.

Salinee Wangtal, SME Bank chairwoman, said the state bank had targeted providing the entire Bt15 billion in policy loans by the end of this year.

She also said the bank’s profit in the first five months of the year was Bt503 million, which was more than targeted under the bank’s recovery plan.

The bank gave out Bt13.623 billion in loans in the same period.

The loans were given to 6,061 SMEs at an average of no more than Bt15 million per operator, and the bank had Bt86.461 billion in outstanding loans.

SME Bank had non-performing loans worth Bt28.785 billion, which was 4.32 per cent less than the Bt31.960 billion at the end of last year. Salinee described the drop as "satisfying" given the weak state of the economy in the first half of the year and said the figure should decrease further in June as sold NPLs would appear in the calculations.

Meanwhile, the Export-Import Bank of Thailand will launch a one-year 29-per-cent interest-rate discount for certain customers who register to take out a loan at the bank’s booth at the government’s Special Financial Institutions Roadshow.

The state banks’ roadshow, which includes nano-finance operators, will be held in Bangkok, Songkhla, Chiang Mai, Udon Thani and Rayong this weekend.

Exim Bank’s discount applies to loans to help SMEs start up, secure working capital for business operations or to expand, trade with neighbouring countries, invest in special economic zones or engage in research and development.