BAAC aims for B72bn in SME loans

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) aims to extend 72 billion baht worth of farming loans to small and medium-sized enterprises (SMEs) and create at least one agricultural SME operator in every tambon nationwide in this financial year.

The loans are expected to be offered to 30,000 agricultural SME operators, said Somsak Kangteerawat, senior executive vice-president of BAAC.

The bank wants to see at least one agriculture SME operator in each of 7,305 tambons across the country, using them similar to how a railway locomotive pulls carriages, driving farm business in each area, he said. The BAAC extended 48 billion baht worth of agricultural SME loans to 2,200 operators last year, which act as supply chains for 20,000 farmers.

The farm bank’s financial year runs from April 1 to March 31.

Its loan scheme is called One Tambon One Farming SME. Under the programme, each qualifying farm is eligible to seek up to 20 million baht in loans at 4% interest for the first seven years of the repayment period.

The scheme is in accordance with the government’s policy to reform the agricultural sector and focus on innovations that will make Thai farmers and agricultural processors become more technologically adept.

Local development and farming SMEs are government priorities to strengthen the domestic economy and sustain the country’s economic growth. The government is seeking methods to boost farm income, including persuading them to pool their farmland into one large plot, a megafarm project, to cut their production costs by 30-40%.

Finance Minister Apisak Tantivorawong recently ruled out using another rice pledging scheme to help farmers.

Mr Somsak said several agricultural SME operators such as Banana Society — a dried banana producer in Phitsanulok province — and Lemon Me — a ready-to-drink lime juice manufacturer — can increase farmers’ income through supply chains.

One Tambon One Farming SME is part the BAAC’s series of loans aimed at spurring farmers into becoming value-added agricultural product manufacturers.

The BAAC’s loans outstanding amounted to 1.21 trillion baht at the end of March, up 10.6% from a year earlier.