Finance Ministry seeks to open loan access for SMEs hit by pandemic

MONDAY, JUNE 17, 2024

Ministry set to call on the central bank, credit bureau to reduce blacklist period for businesses burdened by the impact of events like the Covid-19 pandemic

The Finance Ministry is urging the Bank of Thailand (BOT) and the National Credit Bureau to expedite loan access for 4 million small businesses that were impacted by the Covid-19 pandemic.

Deputy Finance Minister Julapun Amornvivat said on Monday that these debtors are set to be freed from the five-year blacklist next year, and even then, their names will remain in the credit bureau’s database for three years.

Being denied loan access for eight years is far too long, he said, adding that it should be reduced to six years – three years in the blacklist and another three years in the credit bureau’s database.

He said this adjustment will not undermine financial discipline and will give businesses a chance to recover after the impact of adverse events.

“The Finance Ministry will discuss with the Bank of Thailand and the National Credit Bureau to come up with ways to reduce non-performing loans caused by situations like the Covid-19 pandemic, so debtors can be free from the blacklist sooner and access loans again,” Julapun said.

Previously, the credit bureau had said that even when debtors are no longer blacklisted, stringent loan-granting rules by financial institutions create significant barriers to accessing loans.

If a loan repayment is not done for more than three months, it is marked as an NPL (non-performing loan) and the debtor is blacklisted for five years.