DEPA, TCG, banks backing loan plan for smart SMEs, start-ups

 THE Digital Economy Promotion Agency (DEPA) is cooperating with seven financial institutions to provide loans totalling around Bt10 billion to support smart small and medium-sized enterprises and start-ups, expecting more than 1,000 businesses to take advantage of the scheme by the end of the year.
Digital Economy and Society Minister Pichet Durongkaveroj said the participating financial institutions were Kasikornbank, Bangkok Bank, Krungthai Bank, SME Bank, Government Savings Bank, Siam Commercial Bank, and the Thai Credit Guarantee Corporation (TCG). 
The loans will be for smart enterprises to develop software, digital technology and other innovations. The aim is to create or strengthen sustainable businesses for the long term, help them reduce risk and provide opportunities for them to enter the market. 
The TCG will provide 100-per-cent guarantees for loans from participating banks to smart SMEs and start-ups certified by DEPA.
Pichet said the total value of loans granted under the programme this year would be Bt10 billion. There are now around 300 enterprises under consideration for the loans.
“I think that the cooperation between the government and [the financial institutions] will help smart SMEs and start-ups that are seeking funds to support their businesses develop new products and technology services [bring their] innovations to the market.” 
Wichet Warakul, senior executive vice president (business group) at TCG said that the corporation and DEPA would be the facilitators to evaluate SMEs and start-ups that submit their business models to qualify for loans from the participating banks. After the TCG and DEPA certify an applicant, they will notify the banks that the loan will be guaranteed. 
The TCG has budgeted Bt10 billion to support the project.
The TCG will provide 100-per-cent guarantees for loans to SMEs under the programme from Bt10,000 to a maximum of Bt20 million. For start-ups, the guarantees are for loans from Bt10,000 to Bt5 million. 
The evaluation and certification process for the 300 businesses currently under consideration will take around a month. The TCG expects that by the end of this year around 1,000 SMEs and start-ups will be participating in the project.
Wichet said the TCG expected a non-performing-loan rate of 20-50 per cent within 10 years.
Meanwhile, the TCG this year is budgeting Bt100 billion for loan guarantees to support general SMEs. It is also preparing a budget of Bt13.5 billion to support loan guarantees for micro entrepreneurs.