Cabinet raises TCG’s target for loan guarantees to Bt150 bn for year (in boost for SMEs)
THE Thai Credit Guarantee Corporation (TCG) has been approved to extend guarantees on Bt150 billion in loans for this year, in a ruling by the Cabinet that increases the target from Bt110 billion, TCG chairman Surachai Danaitangtrakul said yesterday.
The funding announcement follows the agency’s success in guaranteeing Bt56.15 billion in loans for the first half of this year, marking a jump of 90 per cent from the same period of last year when it covered Bt29.59 billion in loans. The guarantees cover loans to SMEs and entrepreneurs for a total of 57,177 firms, Surachai said.
He said the Cabinet had approved an extension of relief measures worth Bt16.5 billion for struggling SMEs.
The continuation of the measures, which will be applied though two credit guarantee projects run by the TCG, were announced at a mobile meeting of the Cabinet in Ubon Ratchathani province last week. Of the two projects, the credit guarantee for micro entrepreneurs - phase 7 of the scheme that was approved by the Cabinet - has a credit guarantee amount of Bt15 billion and the TCG has asked the government for Bt3 billion in compensation for fees and guarantees for this project.
Under this project, the TCG will allocate the amount to participating financial institutions as it deems appropriate.
Financial institutions will extend loans to SMEs with no more than a 10-year credit guarantee of a maximum of Bt200,000 per SME. About 150,000 enterprises are expected to gain access to sources of financing with an additional revolving credit of about Bt15 billion in the system.
The other project – known as PGS, phase 7 - has a credit guarantee of Bt150 billion with a cap of Bt40 million for no more than a 10-year credit guarantee for each SME, and the TCG has requested the government for Bt13.5 billion in compensation.
Of the total compensation, Bt3.375 billion will be compensated for guarantee fees and a maximum of Bt10.125 billion for guarantees throughout the project period of 10 years.
Under this project, about 43,000 more SMEs will gain credit access with additional revolving credit of no less than Bt240 million, or 1.6 times the amount of the credit guarantee. The extension of the measures came after the TCG’s Bt13.5 billion credit guarantee for micro entrepreneurs, phase 2 ended on June 30, and TCG’s Bt100 billion portfolio credit scheme (PGS), phase 6 ended at the same time, Surachai said.
The two projects will boost TCG loan guarantees to achieve the targeted Bt110 billion by the end of this year, Surachai added.
