New Business Security Act expected to help more SMEs get loans

Chainarong Chochai, inspector-general of the ministry, said once the Act was enforced SMEs should be able to access funds more easily as they could use their assets as collateral.
The Business Development Department will help train SMEs on how to access loans before the Act is implemented.
In the first year after the Act is enforced, the number of loans granted to SMEs is expected to grow by up to 10 per cent, Chainarong said.
He said instead of using mortgages or having to pawn assets, SMEs would be able to use assets – such as raw materials, inventories, aircraft, freight, patents, copyrights and trademarks – as guarantees for loans or to secure their liabilities.
Enterprises will have a greater opportunity to expand under the new Act, Chainarong said.
This will benefit the economy, while Thailand’s image and its ease-of-doing business ranking should improve, as the government has new laws to help enterprises and facilitate business growth, he said.
The drawing-up of the Business Security Act was supported by the Commerce and Finance ministries as they sought to solve the problems SMEs were facing in accessing funds. The law also aims to reduce the problem of loan sharks, as some SMEs who could not source funds through financial institutions rely on illegal lenders.
To enhance understanding of the Act, the department will continue to hold seminars for SMEs, financial institutions and some 10,000 officials from government agencies and private companies affected by the law.
This is being done so the Act can be enforced efficiently.