New bankruptcy act authorises rehabilitation of SMEs
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FINANCIALLY troubled small and medium-sized enterprises could find easier debt restructuring after the Legal Execution Department (LED) launched a rehabilitation law, while the SME sector recorded its seventh consecutive quarter of growth in the first thr
Ruenvadee Suwanmongkol, director-general of the department, said the Bankruptcy Act (No 9) BE 2559 (2016) for SME rehabilitation took effect on May 25, permitting SMEs facing a liquidity crunch and unable to repay their debts to request rehabilitation. Earlier, only limited companies and public limited companies were allowed to request rehabilitation.
Salinee Wangtal, director-general of the Office of Small and Medium Enterprises Promotion (OSMEP), said the new bankruptcy law would help an ordinary person or a juristic person who has debts of no more than Bt10 million restructure debt more easily. In a case where a main creditor accepts a rehabilitation plan, other creditors cannot file a case against that person.
OSMEP will ask affected SMEs to submit their rehabilitation plans, and there is a high possibility they will be able to borrow from the office’s turnaround fund. About 7,400 SMEs that have seen consistent drops in their income for the past three years could benefit from this act.
At the end of 2015, there were approximately 2.77 million SMEs, up 1.07 per cent or 29,242 from a year earlier.
Salinee said the gross domestic product of the SME sector rose 5.1 per cent in the first quarter of this year, to Bt1.49 trillion. SMEs’ GDP contribution edged up to 42.3 per cent from 41.1 per cent in 2015.
Growth in the small and medium-sized service sector was cited for the SMEs’ GDP growth, driven mainly by expansion in tourism and the government’s measures to stimulate public spending.
Tourism, hotels and restaurants, construction, and transport and logistics registered high growth in the first quarter of this year.
OSMEP forecasts this year’s SME GDP growth in the range of 5.0-5.5 per cent.
April’s SMEs sentiment index for tourism and transport saw a sharp increase in line with high improvements in tourism during the Songkran Festival and other long holidays.
Based on a recent survey, the Trade & Service Sentiment Index (TSSI) fell in April from the previous month after declines in sales and profit of the retail sector as a results of long holidays of businesses in several areas.
Meanwhile, the sentiment indices for tourism and transportation jumped, while that for hotels stayed the same, given high season for tourism during long holidays.
Three-month sentiment index inched up in April, reflecting business operators’ confidence in the future.
OSMEP, the Legal Execution Department and the Small and Medium Enterprise Development Bank will jointly hold an event on “Collaboration for SMEs to Turn around with Attention” at Queen Sirikit National Convention Centre in Bangkok on June 27.
