PM urges banks to ease loan terms for SMEs

[rooster59]

PM urges banks to ease loan terms for SMEs

BANGKOK: Prime Minister Gen Prayut Chan-o-cha yesterday asked for the cooperation of commercial banks to consider approving more loans for new SMEs or start-up E to facilitate greater investment by small businesses.

The request was made as SMEs complained loan conditions for them by commercial banks remain tight and strict.

Government spokesman Maj Gen Sansern Kaewkamnerd revealed that the prime minister has been closely monitoring developments with regards to loans for small to medium sized enterprises (SMEs).

Statistics showed that interest in setting up such businesses continues to rise and the total sum of loan applications at present amounts to 40 billion baht.

Previous estimates were that a total sum of 50 billion baht in loans for Start-Ups would be made which make the current statistic agreeable.

This positive development however is tempered by comments from some parties to the prime minister that the approval of such loans are normally restricted to old clients of banks and are not widely distributed to newer applicants who wish to start new businesses.

Furthermore, the spokesman said another difficulty that is being faced by new applicants is the extremely strict criteria that commercial banks practice when it comes to new loans being approved.

The prime minister saw this may not be conducive to fostering greater growth for SMEs or Start-Ups or older businesses that have run into hard times.

Maj Gen Sansern stated that it is for this reason that the prime minister has asked commercial banks to see the necessity of the government’s plans to develop greater SME growth in the country.

This policy will place more emphasis on fostering greater competitiveness within local businesses which in the long-run will generate higher employment and allow the birth of new enterprises, he said.

The spokesman added that this will allow local businesses to keep-up with the volatile, ever-changing global business climate.

Source: http://englishnews.thaipbs.or.th/content/147868

-- Thai PBS 2016-01-23

[PatOngo]

"...........another day older and deeper in debt"

[onni4me]

No assets, no guarantees, no deposits equals to...no loans.

Perhaps government and PM could be guarantors for all willing SME's?

No? That's what I thought...

[Nbarch]

More easy credit - it will all end in tears.

[Bluespunk]

And if these SME's go bankrupt the govt will reimburse the banks for any losses they may incur, yes?

[wabothai]

I just suffered from foot in mouth.

[connda]

No assets, no guarantees, no deposits equals to...no loans.

Perhaps government and PM could be guarantors for all willing SME's?

No? That's what I thought...

The average Thai household is extended close to 250k THB in personal debt, but it's risky to lend money to small business startups. Small business generate income; heavily indebted households do not.

Sourced from the Thai Chamber of Commerce (avg Thai household debt at 248,004 THB per household)

[Srikcir]

Last year Prayut gambled 396 billion baht in stimulus aid to SME's in two phases that included loan guarantees, below market interest rates, tax cuts and tax exemptions in hopes of reviving the economy through SME's. Somkid expected such financial aid would only create a small spike in the economy in 2015 but for the long-term (ie., 10 years) more basic restructuring of the entire Thailand economy was needed.

Now 2016 seems to be starting with little remaining in the fiscal year 2016 budget, not helped by Prayut's repeated off-budget projects and subsidies. So turning to the banks to essentially supplement the government's assistance to SME's would make sense. But for the bank investors it would not make sense to give up profits.

Prayut will have to offer the banks incentives for their charity. That might come in the form of regulatory relaxation and tax relief for banks.

To do so will put Thailand at further economic risk going into 2017. A good time for Prayut to then turn the government over to the politicians!

[Cake Monster]

I really have no clue how a loan from any source can be drawn down by persons whose only assets are the iphone and pickup truck they purchased from a previous loan.

It would appear to me that most " SME,s " here in LOS, are not what we would consider to be a SME in the developed world.

Most small business,s here would appear to be just a means of feeding the family, and any possible earnings are committed to rental properties ( both business and personal ), outstanding loans ( mainstream, and black ) and there is very little profit ( if any ) to be made.

Coupled along with an extremely poor ethos of business know-how, and there is a recipe for disaster for these business,s, and all the people involved.

[onni4me]

Most small business,s here would appear to be just a means of feeding the family, and any possible earnings are committed to rental properties ( both business and personal ), outstanding loans ( mainstream, and black ) and there is very little profit ( if any ) to be made.

Coupled along with an extremely poor ethos of business know-how, and there is a recipe for disaster for these business,s, and all the people involved.

As a someone who's family has or has had several businesses, I can agree to all what you say.

If you don't have your own property in a good location, it is almost impossible to make significant profit. The capital needed to accomplish this is out of the reach for most Thai families.

For good locations the rents are sky-high and that's where all the profit goes. The greed plays a part in this also. Couple good years and the owner of the property hikes the rent so much that one must leave. Happened to us also and not to mention the unwillingness to actually renovate the place or so...

Recently walking through Central and TukCom in Khon Kaen, I noticed at least 20 empty shops just in Central. Tukcom has several also. Central has very high rents and I just wondered years ago when it opened does Isaan have enough people with money to buy for those prices? Seems that not enough and we are just in the beginning of the doom and gloom of downward economy.

Thai are copycats. The recent fab seems to be fitness and gym popping up everywhere. One place that had quite a few customers now has 4 other places as competition. Wonder how long this is a profitable business?

I also see that Thailand would need significant and big chances in the way they do many things but as long as the junta keeps power, I see nothing in the horizon.

[jaywalker]

And if these SME's go bankrupt the govt will reimburse the banks for any losses they may incur, yes?

Let the government pay for it!

I'm agreeing w/ you BP.

It's not only hopeless, It's hilarious when people (sheeple) say "Let the Government take care of it".