Tuesday, January 21, 2020

Loan guarantor eyes micro SMEs

Apr 21. 2019
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By Somluck Srimalee
The Nation

TCG to help the pave way for loans from financial institutions

Thai Credit Guarantee Corporation (TCG) targets annual growth of 20-30 per cent in loan guarantees till 2022 from the end of last year, focusing on small and medium enterprises (SMEs/micro SMEs), said the company's new president Dr Rak Vorrakitpokatorn in an interview with the Nation. 

“Currently, up to three million SMEs are operating in the country, of which two million are unable to access loans from commercial banks, picos and nano finance companies, while the other one million have already secured funding from financial institutions. In addition, there are two million micro-SMEs who have also been denied access to loans," he said. 

Micro SMEs include  taxi drivers, motorcycle taxi drivers and small online businesses, he added. 

"Micro SMEs is now our target group. We will advise them on ways to successfully apply for funding from banks and finance companies. As a priority in driving growth, we have set out to support these small operators and to enhance our reliability among lenders in the process of loan approval". 

Rak took over the presidency four months ago on a four-year term till the end of 2022.

In line with the new strategy, the company will adjust its business model from evaluating loan guarantees for companies suggested by the banks to reaching out to potential clients. 

"We plan to launch Loan Clinic, an online app offering advice and expertise from how to manage a company's revenues and spending to preparing financial statements for a loan application. It will be unveiled next month, he said. 

Rak said the app is accessible to all users and TCG will waive the guarantee fee for the first year as means to reduce a company's operation cost prior to applying for a loan.

This year, the company will invest up to Bt200 million in upgrading its information technology(IT) system in line with the new business model. 

To meet customer demands, another Bt300 million will be spent on digital technology development between 2020 and 2022.  

With the upgrade of its IT system, TCG will further reduce the process of loan guarantee approval for its customers to a single day next month. The process has already been reduced from 14 days to three days, he said.

“The faster working process will increase our approval target for loan guarantees from an average of Bt88 billion in previous years to Bt115.5 billion this year. It will also boost the number of our new customers from an average of 54,969 a year to 89,166 in 2019,” he said.

TCG is also embarking on a re-organisation process. It has appointed PWC as its adviser on business restructuring and operational direction for the future.

These measures will drive TCG forward as the top guarantor for both loan applicants and lenders in the country, Rak concluded.

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