Cabinet okays Bt100-billion package to assist struggling SMEs

[webfact]

Cabinet okays Bt100-billion package to assist struggling SMEs

By The Nation

 

Lavaron Sangsnit, director-general of Fiscal Policy Office, as the SMEs have been experiencing high risk stemming from the US-China trade tensions, uncertainty of the global economy, export contraction and the strengthening of the baht, the Cabinet on Tuesday approved an assistance package proposed by the Finance Ministry.

 

The Cabinet on Tuesday (January 7) approved a financial package of more than Bt100 billion to support struggling small and medium-sized enterprises, including tax exemption to SMEs who restructure their loans with banks.

 

As the SMEs have been experiencing high risk stemming from the US-China trade tensions, uncertainty of the global economy, export contraction and the strengthening of the baht, the Cabinet on Tuesday approved an assistance package proposed by the Finance Ministry, Lavaron Sangsnit, director-general of Fiscal Policy Office, told a press conference.

 

For those who need more liquidity to run their business, the state-owned Thai Credit Guarantee Corporation (TCG) has set aside a credit guarantee facility worth up to Bt60 billion. Eligible are those have business potential but whose ability to repay debt had reduced , those who are on the list of non-performing loans, or those who restructure their debts with banks and get new loans from those banks. The TCG insurance will cover 40 per cent of total loan losses incurred by SMEs for banks.

 

The Government Savings Bank (GSB) will offer soft loans to commercial banks worth up to Bt15 billion at 0.1 per cent annually. Then those banks will charge SMEs an interest rate lower than the market rate, or at 4 per cent for a seven-year loan.

 

Banks can re-lend to SMEs that are in the supply chain, those that are not among 10 S-Curve businesses. Banks could also give loans to SMEs placed on the non-performing loan list but who have been successful in getting their debt restructured with banks.

 

The GSB will also launch SMEs Extra Liquidity with loans of Bt 50 billion. Each borrower could get up to Bt50 million with interest rate based on the minimum loan rate (MLR) minus 1 percentage point. Currently the MLR is 6.375 per cent, meaning that SMEs will be charged just 5.357 per cent per annum. Borrowers could have up to a six-year contract with a one-year grace period for principal payment.

 

The TCG will extend credit guarantee for SMEs that are needed for immediate support under the PG5-PGS7 programme for another five years. Banks are allowed to restructure debts with these SMEs.

 

The Small and Medium Enterprise Development Bank of Thailand will offer soft loans worth Bt5 billion to micro-SMEs. The SME bank will charge an interest of just 1 per cent per annum, a maximum loan term of seven years and a one-year grace period of principal payment. Eligible borrowers are those who have business potential or those who have debt restructured.

 

The SME bank will also offer loans worth up to Bt20 billion for SMEs, aimed at promoting the local economy. Those eligible will be on the bank’s bad debt list who have had their debts restructured.

 

GSB will also offer loans worth Bt45 billion to SMEs at 4 per cent interest rate in the first two years. The GSB will also pay the TCG credit guarantee fee for SMEs for four years.

 

State-owned Krung Thai Bank will top up its SME loans by more by Bt10 billion, leading to total SME portfolios loans up to Bt60 billion. The interest rate will start at 4 per cent per annum and KTB will pay TGC guarantee fee for SMEs for four years.

 

The TCG will also pay compensation to 

 

banks participating in the PGS8 programe, in order to discourage banks from taking legal action against debt defaulters and encouraging banks to facilitate loan restructuring.

 

The TCG also offers direct guarantee worth up to Bt5 billion and each SME could get up to Bt10 million insured amount.The TCG will charge a guarantee fee according to risk-based pricing and insured period no more than 10 years.

 

The Bank of Thailand will consider relaxing the loan reserve ratio for commercial banks and specialised financial institutions, said Lavaron.

 

A member of Thai Bankers’ Association will help SMEs with debt restructuring. Each bank will set as target for supporting SMEs Tax measures to support SMEs.

 

Income tax exemption will be applied to debtors who get debt forgiven by creditors engaging in credit card and personal loan businesses.

 

Exemption of taxes including income tax, value-added tax, specific business tax will be applied for transaction of assets or services involved in debt restructuring.

 

Firms that undergo debt restructuring are exempted from income tax, value-added tax, specific business tax and stamp fee for related transactions of real estate being placed as loan collateral.

 

The Revenue Department will also suspend existing regulations related to debt write-off for restructuring debt.

 

Those engaged in debt restructuring will get a reduction in registration fee, mortgage fee for home and residential condominium units from 2 per cent to 0.01 per cent.

 

Source: https://www.nationthailand.com/business/30380256

 

-- © Copyright The Nation Thailand 2020-01-08

Follow Thaivisa on LINE for breaking Thailand news and visa info

[dinsdale]

Small businesses are closing left, right and centre. Problem? People don't have enough money in their pockets. Why? Incompetent and corrupt military government. That's my opinion.

[RichardColeman]

And solving the self made baht export crisis by ? 

[mickey rat]

More debt, that'll fix it! Wait until the bottom drops out and they will be jumping from their condos. 

[hotchilli]

8 hours ago, webfact said:

The Cabinet on Tuesday (January 7) approved a financial package of more than Bt100 billion to support struggling small and medium-sized enterprises, including tax exemption to SMEs who restructure their loans with banks.

So PM & Co have screwed up the economy, banks are un-able to get the baht under control, the commerce ministry still blames everything on world issues, the export market has all but crashed, the tourism industry is in dire straits.. and it's going to cost 100 billion baht to stop struggling SME's from going under, putting thousands out of work.

I wonder if he now wonders why the country doesn't operate like the barracks did... no responsibility for ones actions and billions to play with new toys, no questions asked.

He's going to be on a slippery slope this year if things stay as they are or if they get worse, which is the way it's looking.

Everyone's looking for a bail-out scheme... I wonder where the monies coming from?

 

 

[Cake Monster]

8 hours ago, dinsdale said:

Small businesses are closing left, right and centre. Problem? People don't have enough money in their pockets. Why? Incompetent and corrupt military government. That's my opinion.

And my opinion is that the majority of these so called Business,s are just not competitive.

Thai labour is at best lazy, and downright arrogant when it comes to doing Business.

I have lived here 15 Years, and the majority of so called " Business,s " are just out to rip people off with the attitude " I do work for you, so you pay me big money. I am doing you a favour by coming to work for you "

Let them sink out of sight, as then only the better outfits will be left to carry on.

[dinsdale]

7 hours ago, Cake Monster said:

And my opinion is that the majority of these so called Business,s are just not competitive.

Thai labour is at best lazy, and downright arrogant when it comes to doing Business.

I have lived here 15 Years, and the majority of so called " Business,s " are just out to rip people off with the attitude " I do work for you, so you pay me big money. I am doing you a favour by coming to work for you "

Let them sink out of sight, as then only the better outfits will be left to carry on.

I've lived here 17 years and I disagree. Just my opinion. As I said people just don't have the spending power. It's not just Thailand but that's where we are. The top 1-5% are raking it in while the ordinary people are really struggling as is the economy. Billions being spent on military hardware for a non-existant threat while people languish and small businesses (restaurants, small shops for example) go under. I say let the Military govt sink out of sight and then maybe Thailand can carry on.