State-owned Thai Credit Guarantee Corporation (TCG) is set to provide a credit guarantee for innovative companies through a scheme aimed at providing opportunities for them to access financial sources.
TCG is drafting a proposal for the Finance Ministry, said president Vallobh Tejapaibul.
Vallobh: Eye on digital economy
It will pay lenders all debts owed by borrowers in cases where up to 50% of a lender's portfolio for the credit guarantee scheme turns sour.
Even companies whose innovations are uncomplicated are eligible to apply for the credit guarantee, Mr Vallobh said.
Under TCG's current guarantee portfolio scheme, it makes a full payment to financial institutions with a maximum coverage of 18% in normal cases and up to 80% with ceiling coverage of 37.5% for start-up companies.
TCG's new scheme is in line with the government's policy to push Thailand as a digital-based economy.
Mr Vallobh said TCG would sign a memorandum of understanding in December with Korea Technology Finance Corporation (Kotec) to provide knowledge and experience for the scheme.
Kotec will also help TCG to arrange a technology appraisal and valuation system. The Korean company has provided guarantees to 45,000 technology-focused borrowers, of which 12,000 are start-up firms. It now guarantees loans on an individual basis with a payment of 80-90% of loan value when loans become non-performing.
TCG is expected to start offering credit guarantees for innovative companies by 2016.
Chatchai Khunpitiluck, vice-president of the Software Industry Promotion Agency, said it would help TCG select innovative companies.
It is essential for the country to create innovations to push towards a digital economy, he said.
Eligible companies must use innovations to differentiate themselves or add value to products and services.
For example, a farmer can apply for the credit guarantee if he or she uses an iPad or smartphone in monitoring weather conditions.