Bonds to finance social projects planned

Firm investment could counts as CSR

The Finance Ministry has assigned the Public Debt Management Office to enable the private sector and the Social Development and Human Security Ministry to issue social bonds to finance social projects.

As social bond buyers will not earn a return on projects funded by social bond issuance, large companies whose stocks are traded on the SET100 index could subscribe to the bonds and could count their investment in social bonds as corporate social responsibility, said finance permanent secretary Somchai Sujjapongse.

Proceeds from social bond issuance could be used to fund a variety of social projects, including cheap housing for low-income earners or programmes that develop the work skills of prisoners.

The Finance Ministry stands ready to consider tax incentives to support social bond sales, Mr Somchai said, adding that whether the planned social bond offering can bear fruit will depend on private sector interest.

In another development, Mr Somchai said the government will allocate 41 billion baht out of the 46-billion-baht Pracha Rat Fund for low-income earners to finance subsidies and welfare for participants in the government’s poverty scheme.

The government plans to allow the private sector to donate to the Pracha Rat Fund, but it needs legal amendments to authorise the Finance Ministry to accept the donations, he said.

Mr Somchai said the Finance Ministry aims to refinance loans owed to loan sharks by low-income earners whose qualifications met the requirements of the government’s poverty scheme at state-owned banks by the year-end.

The ministry said recently 1.3 million of the 14.1 million people who signed up for the government’s welfare and subsidies scheme reported they were indebted to loan sharks.

The cabinet last month approved an aid package that includes allowances for rides on public buses and trains, and subsidised utility bills for 11.67 million qualified lowincome earners who registered with the state agency.

The scheme is scheduled to come into force on Oct 1, the start of fiscal 2018.

Moreover, the scheme’s recipients who earn under 30,000 baht a year will receive money to help them meet basic needs and rise above the poverty line.

RARINTHORN PHETCHAROEN Villagers, soldiers and staff of a private company help build a dyke to prevent floods at a village in Bo Klue in Nan province. The activity is part of the company’s CSR project and an example of a scheme that could be financed by social bonds.