Cabinet okays 8.28bn baht for measures to help SMEs get loans

TUESDAY, JUNE 11, 2024

Measures set to cover interest, and guarantee fees for 10-year loans of no more than 10 million baht per small business

The Cabinet has approved two measures proposed by the Finance Ministry that will see the government spending 8.28 billion baht on interest and loan guarantees to help SMEs get loans.  

Speaking to reporters after the weekly Cabinet meeting on Tuesday, Prime Minister Srettha Thavisin said the government will spend 1.15 billion baht on the first measure, which will help SMEs in three target groups get soft loans from the Government Savings Bank (GSB).

He said the Cabinet has also earmarked 7.13 billion for the Thai Credit Guarantee Corporation to spend on guaranteeing loans for SMEs under the 11th phase of the Portfolio Guarantee Scheme (PGS11).

After Srettha spoke to the press, government spokesman Chai Wacharonke stepped forward to elaborate.

Under the first measure, which is called the “Ignite Thailand” soft loan project, the GSB will provide 5 billion baht worth of soft loans to SMEs in the industries of tourism, wellness and medical, and agriculture and food.

He explained that the government will spend 1.15 billion baht on covering the interest cost for GSB, adding that each SME will be eligible for a soft loan of no more than 10 million baht for 10 years.

These loans will be granted at an interest rate of 2.5% per annum for the first two years with a six-month grace period. The interest will then be reduced to 0.75% per annum for the following two years before it rises to 1.75% per annum from the fifth year.

Chai added that under the second measure, the Thai Credit Guarantee Corporation will guarantee loans worth 50 billion baht for SMEs.

This would allow SMEs to be exempted from loan guarantee fees for the first two years, after which they will be charged 0.75% as a fee in the third and fourth years. He did not elaborate further but said these two measures would make it far easier for SMEs to get loans.

Separately, Deputy Finance Minister Paophum Rojanasakul said these two projects will give SMEs access to funds that will help them expand their business and subsequently help the Thai economy grow.