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New state spending rule gives small businesses access to Bt400bn from Oct 1

Sep 23. 2020
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By The Nation

Small businesses will get a big boost from October 1, when new Finance Ministry rules on state procurement come into effect.

The rules stipulate that 30 per cent of each government agency’s budget must be spent on procuring items or services from small and medium enterprises (SMEs), said Veerapong Malai, director-general of the SME Promotion Office.

Local SMEs will also get top priority in supplying state development projects within their province. State agencies can only seek outside SME suppliers if they cant’ find any within the province or have already contracted at least two local SMEs.

The new rules are aimed to assist micro SMEs with less than five employees and small enterprises with around 50 employees.

State agencies that fail to meet the 30 per cent requirement must explain the reasons in a report to their superiors, he added. The new rule is expected to grant SMEs access to state spending worth Bt400 billion.

State agencies spend about Bt1.3 trillion per year on procurement. About 45,000 SMEs are currently under contract with state agencies. However, most are medium-sized enterprises in the construction sector.

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