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SME bank to offer Bt40 bn in soft loans to freelance workers  

Dec 25. 2018
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By The Nation

The Small and Medium Enterprise Development Bank of Thailand (SME Bank) will support freelance workers with Bt10-billion in soft loans for taxi drivers and another Bt30-billion for borrowers of the Student Loan Fund (SLF) who want to work independently. 

Mongkol Leelatham, president of SME Bank, said that "SME Bank will extend Bt10-billion in soft loans to persons who want to work freelance as taxi drivers at Bt700,000-Bt1 million each with a repayment period of  4 to 7 years. The soft loan will carry a lending rate of 0.42 per cent per month or about 2 per cent per year.

About 90,000 taxis  are close to the end of  life with consistent complaints for improper car status. The loans will help drivers improve their cars, he said. Aside from the loans, the bank will help taxi drivers access the government’s  social security system, National Savings Fund as well as taxi driving practice.

Mongkol said  the bank will also extend Bt30 billion in soft loans to those borrowing under the SLF and wish to work freelance.

"The loans  require no collateral and the borrower’s debt repayment capability will be  considered. We will ask the  Thai Credit Guarantee Corporation (TCG) to provide  collaterals for the borrower. We charge low interest rate as we consider them borrowers of  Student Loan Fund with good repayment record," he said.

About 200,000 out of 3.7 million Student Loan Fund borrowers who are in the repayment process are expected to participate in the soft loan project.

Chainarong Kajchapanan, SLF fund manager,  said the fund has recorded over 5.5 million borrowers  of which some are new entrepreneurs or permanent employees who decided to quit for their own businesses.

If these groups of borrowers have good financial discipline or good repayment record, they should be given an opportunity for financial assistance to extend their businesses, he said.

Based on Kasikorn Research Centre (KResearch), 14 commercial banks recorded an increase of  0.76 per cent year-on-year or Bt87 billion in total net loan to Bt11.515 trillion in November 2018. 

November's deposits declined by 0.49 per cent or Bt62 billion to Bt12.44 trillion.

Bank liquidity remained high in  November although loan to deposit plus borrowings rose, thanks to  the opposite moves of loan and deposits, the research house said.

Theses 14 banks' liquidity stayed over Bt3.6 trillion, a slight drop from the previous month.

 Meanwhile loan to deposit plus borrowing ratio increased to 87.85 per cent in November from 86.72 per cent a month before, in line with liquid assets to total assets which decreased to 21.03 per cent in November from 21.64 per cent a month earlier.

This year's loan growth is expected to be  6 per cent, based on the estimates of retail loans  and disbursement of business loans, while next year's loan growth is forecasted  at 5.0 per cent following the economic expansion, according to KResearch.

Business loan is expected to grow continuously, while retail loan is projected to slow following relatively high acceleration in residential loans and auto hire purchases in 2018.

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