Bangkok: The SME Bank has announced its participation in an economic stimulus project, aiming to bolster the economy by guaranteeing 5 billion baht through the PGS11 program. This initiative is designed to support financial institutions in providing loans to vulnerable groups, small SMEs, and exporters who often struggle to secure guarantors and collateral.
According to Thai News Agency, the Director and General Manager of the Small Industry Credit Guarantee Corporation (TCG), Mr. Sittikorn Direksunthon, disclosed that the TCG board has resolved to allocate additional guarantee funds under the PGS11 'TCG SMEs Sustainable' loan guarantee project. The project introduces 5 billion baht in guarantees under the 'TCG Ready to Guarantee' measure, featuring two new loan guarantee products. These products offer free guarantee fees for the first three years, a low guarantee fee of 1.5% in the fourth year, and a maximum guarantee of seven years. They are tailored to assist vulnerable groups, small SMEs, and exporters in accessing loans as per government policies.
The SME Power Trade and Biz loan guarantee project, with a guarantee limit of 3 billion baht per case, offers guarantees ranging from 500,000 to 10,000,000 baht. It targets groups affected by trade wars, supply chain issues, and economic challenges. Meanwhile, the SME Micro Biz loan guarantee project is designed for micro SMEs, online sellers, and freelancers, offering guarantees from 10,000 to 500,000 baht, addressing their need for working capital. Both projects aim to enhance liquidity and reduce the financial burden on SMEs, facilitating sustainable growth.
These projects are considered special measures, encouraging financial institutions to lend to those lacking collateral by offering high compensation insurance rates. The SME Micro Biz project pays claims up to 42% per guarantee portfolio, while the SME Power Trade and Biz project offers claims at 37%, thereby absorbing credit cost risk and boosting confidence among financial institutions.
The launch of these projects is anticipated to generate 5.6 billion baht in loans, aiding 21,000 SMEs in accessing funding, preserving 46,150 jobs, and creating economic benefits worth 20.65 billion baht. Mr. Sitthikorn expressed optimism that the favorable conditions of these projects would encourage banks to extend more loans, stimulating the economy and providing SMEs with much-needed liquidity.
Through this initiative, SME Bank aims to cover five main groups of SMEs in Thailand, including those affected by economic impacts, those needing investment funds, vulnerable groups and startups, businesses transitioning to low-carbon practices, and businesses aligned with national strategies.
The SME Bank is committed to its "Ready to Guarantee, Ready to Help" concept, focusing on facilitating loan access and debt resolution for SMEs. Additionally, the bank offers financial advisory services to equip SMEs with the knowledge and skills necessary for sustainable business growth and effective debt management.