GSB signs deal with banks for soft loans to SMEs
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GOVERNMENT Savings Bank yesterday signed a memorandum of understanding with 19 banks to extend a second tranche of soft loans totalling Bt50 billion to provide small and medium-sized enterprises with working capital.
Chatchai Payuhanaveechai, president of GSB, said that according to a new condition, soft loans would be reduced to a maximum of Bt10 million, from Bt50 million earlier.
The new tranche is expected to help 10,000 SMEs.
About 70 per cent of the first tranche of Bt100 billion in soft loans was extended to SMEs in Bangkok and its vicinities and the rest to businesses in the provinces.
“GSB sees nearly no risk for soft loans as it extends them to commercial banks. About 1 per cent of the total loans to be extended are expected to be non-performing,” Chatchai said.
He said the bank had targeted extending loans, including those under Bt10 million, to more SMEs while promoting start-ups and venture-capital funds.
GSB’s SME centres will be increased from six to 18.
“Usually GSB takes care of SMEs. The government needs us to give more help as GSB is the biggest state-run bank with more than 1,000 branches nationwide,” Chatchai said.
Venture capital funds
Apart from the expansion of loans, the government assigned GSB to join the Small and Medium Enterprise Development Bank of Thailand and Krungthai Bank in establishing venture-capital funds worth Bt2 billion at each bank.
Under that scheme, each bank will extend loans worth Bt2 billion to participating SMEs, and extend Bt12 billion in total.
The Stock Exchange of Thailand will take part in a Bt100-million investment with GSB. The MoU is scheduled to be signed on Thursday, and private sector will also be invited to join the investment.
Each of the three banks’ Bt2 billion in loans will be divided into four venture-capital funds equally. SME start-ups are required to invest no more than Bt10 million altogether, while large SMEs are required to invest no more than Bt50 million.
The funds will have a maturity of 10 years.
