Somkid urges SME loans
Deputy Prime Minister Somkid Jatusripitak has asked the Thai Credit Guarantee Corporation (TCG) to speed up its loan guarantees for small and medium-sized enterprises (SMEs) to allow them access to financial sources from banks after finding that just 17% of the 100 billion baht in credit guarantees has been granted.
He said 17 billion baht worth of credit guarantees have been approved by the TCG to SME borrowers during fiscal 2017.
“The remaining 83 billion baht in loan guarantees should be provided to SMEs before the end of this year to help support their liquidity,” Mr Somkid said. “Then the TCG has to speed up their job of revving up their guarantee process to allow SMEs to gain access to loans.”
Regarding reports that the TCG’s loan guarantee process is in a slow pace, Nitid Manoonporn, president of the TCG, said officers need to follow details closely because the TCG is a specialised financial institution. It must evaluate documents thoroughly to prevent an increase in non-performing credit guarantees (NPGs).
“The TCG follows a process of granting guarantees to those SMEs step-by-step, and that takes time,” Mr Nitid said, adding that the types of assets differ, along with the credit guarantee requirements of various commercial banks.
It takes time for SMEs to obtain guarantees from the TCG, and they need to pass through another involved process before getting loan approval from banks, he said.
Moreover, commercial banks also have a different process of loan approval. Mr Nitid said the TCG, commercial banks and the Thai Bankers’ Association will discuss ways to make loan approvals easier.
The outcome of the meeting could go before the cabinet as part of measures to lend support to SMEs, he said.
Mr Somkid also said the government plans to talk with the Finance Ministry, the state-owned banks and the private sector about ways to help increase the competitiveness of SMEs in the long term.
The government wants to help SMEs export more to the fast-growing economies of Cambodia, Laos, Myanmar and Vietnam (CLMV).
However, the SMEs are urged to take out currency hedging to help prevent losses incurred by volatile exchange rates at a time when the US dollar is weak.