NationThailand-Nov 7
The Bank of Thailand (BoT) is considering a new credit guarantee mechanism to help banks extend loans to SMEs, aiming to ease credit costs and boost economic recovery. It is preparing to establish a new credit guarantee mechanism to encourage commercial banks to extend more loans to SMEs. This initiative comes in response to the caution banks have exercised due to high credit risks. The funding for this project will come from the Financial Institutions Development Fund (FIDF), which is not part of the government’s budget. This allows the initiative to be implemented quickly. The new mechanism aims to simplify access to loans for SMEs, helping to reduce the credit risks faced by banks in the event of bad debts. The focus will initially be on targeted industries, such as the five key industries outlined in the “Reinvent Thailand” initiative, as well as industries requiring adaptation. Currently, the government is pushing forward various projects to help the economy navigate the crisis, following the five pillars of its policy. This includes the “Let’s Go Halves Plus” scheme to increase purchasing power and a second pillar aimed at addressing household debt through the use of AMC to purchase bad debts for individuals owing less than 100,000 baht. The next focus is on helping SMEs, which are a vital part of the economy, weather the current crisis. Vitai Ratanakorn, Governor of the Bank of Thailand, acknowledged that the BoT is working in collaboration with three main agencies: the BoT, the Ministry of Finance, and the Thai Bankers’ Association, to find solutions for SMEs, following the measures to address bad debts for individuals owing less than 100,000 baht. The next measure under discussion is a way to support SMEs in gaining access to credit, in hopes of driving economic growth.
