GSB hawks low-interest loans to street food vendors

The state-owned Government Savings Bank (GSB) is set to extend 3 billion baht in soft loans to 10,000 street food vendors to help them with improvements.

Street food hawkers or food trucks are eligible to borrow up to 500,000 baht each, which can be doubled to 1 million if they have collateral pledged for the loan, said GSB president and chief executive Chatchai Payuhanaveechai.

The bank will charge a low interest rate for the loan of 0.4-0.5% per month, half that imposed on borrowers of its People’s Bank scheme. Moreover, the bank plans to produce a reality show filming street food vendors at work, and provide certification to them in order to promote them.

“The bank hopes our scheme will help street food vendors gain more confidence,” Mr Chatchai said. “Thai street food is No.1 in the world.”

Street food attracts many foreign tourists, he said, adding that if 30 million overseas tourists spent 1,000 baht more on better-promoted street food, it would generate 30 billion baht extra for the country.

Last year CNN named Bangkok the world’s No.1 destination for street food.

Apart from street food vendors, GSB has already provided 1.82 billion baht worth of loans to 508 startups.

Mr Chatchai said the bank will soon roll out reverse mortgages, which allows elderly homeowners to convert their home equity into cash with no loan repayments until the borrower dies.

The loans are available to those aged 60 to 85, with a cap of 70% of the home value and an interest rate of 5-6% per year. If borrowers are still alive after 85, they can request additional loans by re-evaluating the asset value.

GSB recorded a net profit of 8.65 billion baht for the four months to April and its loans outstanding rose by 3.9% over the same period last year to 1.98 trillion baht.

The bank’s total deposits declined by 2.8% year-on-year to 2.1 trillion baht at the end of April, and total assets fell by 0.6% to 2.49 trillion.