BAAC to re­fuel loan scheme

An­other B50bn eyed to help farm­ing SMEs


The state-owned Bank for Agri­cul­tural and Agri­cul­tural Co­op­er­a­tives (BAAC) plans to of­fer a new batch of the One Tam­bon One Farm­ing SME loan scheme worth 50 bil­lion baht af­ter the first 72-bil­lion­baht batch is set to be fully drawn down by next month.

The ap­pli­ca­tion pe­riod for the ad­di­tional loans runs from April this year to March 31, 2021, said pres­i­dent Apirom Sukprasert.

The in­ter­est rate for the new lot of seven-year loans will be the same at 4% for the first three years, with the bank to de­ter­mine the rate for the re­main­ing loan term. The max­i­mum loan amount will be dou­bled to 20 mil­lion baht per bor­rower, he said.

The SME farm loans are meant to help farm­ers up­grade the sup­ply chain and drive the lo­cal econ­omy.

The scheme is in line with the bank’s goal to en­large the ra­tio of agri­cul­tural SME lend­ing to 40% of loans out­stand­ing by 2020.

Agri­cul­tural SME lend­ing ac­counted for a mere 3% of the BAAC’s to­tal loans at the end of its last fi­nan­cial year, which ended March 31, 2017.

The gov­ern­ment aims to move farm­ers up­stream in the pro­duc­tion process, help­ing them make value-added prod­ucts to sus­tain­ably boost their in­come.

BAAC has al­ready ex­tended 60 bil­lion baht in loans un­der the scheme to 60,000 bor­row­ers since the project be­gan in 2015, of which 1,000 are agri­cul­tural co­op­er­a­tives, he said. Of those bor­row­ers, 100 have been of­fered the 10-mil­lion-baht ceil­ing.

The scheme is fur­ther in­tended to help SME farm­ers ex­pand abroad, in­clud­ing or­ganic rice pro­duc­ers in Chi­ang Rai prov­ince.

For the first 10 months of the bank’s fi­nan­cial year, BAAC lent 60 bil­lion baht, com­pared with the an­nual tar­get of 86 bil­lion, he said.

The bank’s non-per­form­ing loans are ex­pected to fall to 4% of the to­tal by the end of this fi­nan­cial year, down from 5.1% at present, on the back of im­prov­ing farm prod­uct prices, par­tic­u­larly for rice paddy, said Mr Apirom.

He said BAAC aims to pro­vide 93 bil­lion baht in loans for its 2018 fi­nan­cial year.

The state-backed farm bank is also of­fer­ing a 5-bil­lion-baht green credit to pro­mote or­ganic farm­ing or food cer­ti­fied to be safe, al­ter­na­tive en­ergy, en­vi­ron­men­tal con­ser­va­tion, cul­ture and com­mu­nity.

The bank’s rate for in­di­vid­ual bor­row­ers is one per­cent­age point be­low the min­i­mum re­tail rate, equiv­a­lent to 6%, while com­mu­nity en­ter­prises are charged at the min­i­mum lend­ing rate mi­nus 0.5 per­cent­age points, equiv­a­lent to 4.5%.

The ex­tent of t he credit line is project-de­pen­dent.

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