Picofinance licences to be doled out
Operators to help poor sidestep loan sharks
The Finance Ministry expects to grant picofinance licences to the first 12 operators by next Monday, says the head of the Fiscal Policy Office.
Since the picofinance application process opened on Dec 1, about 80 companies have applied for a licence to run a microfinance business, said director-general Krisada Chinavicharana.
“The ministry already granted one licence to an operator, while 11 applicants are currently being reviewed. Those licences are expected to be granted by Feb 27,” he said.
The relevant regulation requires the Finance Ministry to approve picofinance licences within 60 days of an applicant submitting all the required documents.
The ministry is hoping picofinance operators can help those who are at the bottom rung of the income ladder better access formal financial sources and stay away from loan sharks. They are permitted to lend for general purposes and are limited to loans of 50,000 baht per borrower at a maximum rate of 36% a year.
Picofinance operators are required to have minimum registered capital of 5 million baht, but their operations are confined to a particular province.
The Ministry of Finance will also launch several additional measures to tackle underground lending on Feb 27.
Mr Krisada said that those who have applied for licenses include local goldsmiths, pawnshops and big companies.
He said the applicants are not only based in Bangkok but also other parts of the country, especially in the northern, northeastern and central regions.
“We want every province to have picofinance operators to help people access loans with manageable interest rates,” he said.
Meanwhile, Mr Krisada said the Finance Ministry plans to extend the registration period for the government’s subsidy and welfare scheme to be provided through the national e-payment system.
Registration, which starts from April 3, will now close in mid-May and not the end of April as earlier planned.
The Finance Ministry will require applicants to fill out a less than 2-page-long application, which is being considered by Finance Minister Apisak Tantivorawong and finance permanent secretary Somchai Sujjapongse.
The questions include personal information that doesn’t appear in citizens’ ID cards, such as occupation or outstanding debts.
This information will be used to create specific measures that meet the needs of different segments of low-income earners.
He declined to name the specific welfare programmes and subsidies that will be offered to qualified recipients as the Fiscal Policy Office is still consulting with other related agencies on that matter.
The qualifications will be the same as last year, he said, adding that recipients are required to earn less than 100,000 baht per year. Mr Krisada said the number of people qualifying for the scheme this year is forecast to be higher than last year’s 8.2 million total.