TCG raises targets to back SMEs as driver of economy

It also targets bringing in about 27,000 new SME customers next year. The target ratio of credit guarantees for overall SME loans from 2015-19 is set at 25 per cent.

This year, however, the TCG expects to provide credit guarantees of only around Bt61.5 billion, a drastic decrease from last year’s Bt87 billion. This is blamed on the political turmoil at the beginning of the year, which affected the growth of the economy and of SME borrowing. But the corporation believes that it will return to a normal growth path on the expected economic recovery next year.

Yarnsak Manomaiphiboon, the TCG’s new chairman, said the ratio of credit guarantees to the total of new SME loans had been 20 per cent annually in the past five years. His administration aims to increase that ratio to 25 per cent within five years, since he believes that SMEs are an important driver of the economy. He also wants to increase the number of the TCG’s SME customers from the current level of around 60,000 to 200,000 in the same period to meet this goal.

“The economy is currently in need of support, and SMEs have a big role to play in stimulating the economy. Therefore the TCG believes that we can play a bigger part in this development, especially in helping capable SMEs gain greater access to financing while maintaining the organisation’s sustainable growth to ensure its survivability,” he said.

Colonel Prasert Shusang, a new TCG director, said the corporation would work in close cooperation with the Federation of Thai Industries (FTI), the Small and Medium Enterprise Development Bank of Thailand, and the Office of Small and Medium Enterprises Promotion to find solutions to the problems SMEs are facing, especially the high cost of funds.

“How will SMEs survive, since large corporates are complaining about the high cost of funds when they have to pay 4-5 per cent [interest] and SMEs have to pay around 7-8 per cent?” he asked.

Vallobh Tejapaibul, director and secretary of the TCG, said the corporation would introduce two new projects next year. One will aim to encourage more SME operations in the five new special trading zones, and the other is meant to encourage SMEs to create more innovative products.

The innovation project will be worth Bt2 billion. The TCG is working with the Software Industry Promotion Agency (SIPA) on the project, which aims to estimate the value of and provide guarantees for new innovative products, both hardware and software, for 3,000 operators. The guarantee limit will be Bt20 million per operator with an interest rate of 1.5 per cent, and the government will be asked to pay the financial fees in the first year.

However, the 3,000 operators must gain approval from SIPA and the National Innovation Agency first. The special-trade-zone project will be worth Bt5 billion. Each SME operator that wants to open a business in a special zone can get a guarantee of no more than Bt10 million from the TCGwith a financial fee of 1.75 per cent, paid by the government for the first two years.

The Stock Exchange of Thailand yesterday signed a memorandum of understanding with the FTI to strengthen the capabilities of Thai companies and prepare them to list on the SET and Market for Alternative Investment, in turn boosting business opportunities via the capital market for the upcoming Asean Economic Community.

SET president Kesara Manchusree said the bourse had been a key source of funds for SMEs, as well as family businesses nationwide. This cooperation aims to provide knowledge for FTI members through seminars, featuring prominent guest speakers and entrepreneurs sharing their success stories.FTI chairman Supant Mongkolsuthree said this would help its more than 8,000 members covering 42 industry groups participating in the project, as well as 74 provincial chapters of the FTI nationwide, to get information on how to raise funds from the capital market, especially SMEs.