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Cabinet releases billions more in SME loans to support grassroots economy

Aug 19. 2020
 Deputy government spokeswoman Rachada Dhnadirek
Deputy government spokeswoman Rachada Dhnadirek
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By The Nation

The Cabinet on Tuesday approved five more financial-relief measures to support small and medium-sized enterprises (SMEs) and individuals suffering fallout from Covid-19 and other crises, said deputy government spokeswoman Rachada Dhnadirek.

First, the Thai Credit Guarantee Corporation (TCG) will guarantee loans taken by SMEs under the central bank’s soft loans scheme. The guarantee scheme will cost Bt57 billion and cover loan terms of up to eight years. The guarantee will kick in the third year of borrowing. The guarantee fee is 1.75 per cent annually, with up to 30 per cent subsidised by the TCG. The TCG has asked for Bt9.12 billion in compensation from the Budget Bureau.

Second, the Government Savings Bank will expand coverage of the existing Covid-19 lending scheme to provide loans of up to Bt50,000 to individuals with regular income. The Bt10 billion scheme will also cover small business, the self-employed and families affected by the virus outbreak, economic fallout or natural disasters. The loans have a six-month grace period for principal and interest rate payment. Another Bt5 billion will be earmarked for loans of up to Bt500,000 for small businesses and individuals in tourism-related industries such as restaurants, spas, traditional massage, car rental, guest houses, and hostels. The GSB will charge 3.99 per cent interest rate for a five-year loan term with one-year grace period on interest rate payment.

Third, the Finance Ministry wants the GSB to expand coverage of the Bt80-billion lending scheme for SMEs  approved earlier by the Cabinet. The GSB will offer Bt10 billion in loans to support SMEs in tourism, related services, and other sectors, offered via non-bank financial companies. Another Bt3 billion will be lent directly by the GSB to SMEs. Each borrower will get up to Bt20 million in credit.

Fourth, the Small and Medium Enterprise Development Bank of Thailand will expand its existing loan scheme worth of Bt10 billion for tourism and related services to cover other types of businesses affected by the virus crisis. These loans are open to both individual or corporate entities and capped at Bt30 million. Currently the bank has approved loans worth only Bt417 million, leaving Bt9.6 billion still available.

Fifth, the Cabinet approved extending the loan guarantee scheme under the TCG package to support micro entrepreneurs with total funding of Bt15 billion. Each will get no more than Bt200,000. The deadline for application was also extended from July 23 to December 30. Loans totalling Bt2.5 billion are still available.

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