Flooding helps TCG rack up record for credit guarantees

CHIANG MAI : The performance of Thai Credit Guarantee Corporation (TCG) hit a record 70 billion baht worth of credit guarantees in the first nine months of 2012, due to demand from companies affected by last year's floods.

Of the total, 23 billion baht was for businesses affected by the floods. For the full year, TCG expects total credit guarantees of 74-75 billion baht.

TCG president Wiboon Perm-Arayawong said TCG is tapping into the small enterprise market often overlooked by commercial banks.

So far, 22,000 small and medium-sized enterprises (SMEs) have received support from TCG in 2012, of which 8,000 were new customers.

"Our target customers are those that seek, for instance, 1.3 million baht in loans and need only 1 million to be guaranteed," Mr Wiboon said.

Technology is a must for accessing a borrower's credit risk data from banks, while the borrower need only fill out a form.

"Currently such technologies are not available in Thailand, but we are approaching a foreign bank for support," Mr Wiboon said.

The state-owned TCG was set up in 1991 by the Finance Ministry to help small businesses get loans from commercial banks. Some 3 million SMEs exist in Thailand, a third of which have access to bank loans.

The SME Development Bank of Thailand recently introduced a 20-billion-baht productivity improvement loan to help SMEs in Thailand cope with the rising minimum wage, improve productivity and purchase machinery.

Some 960 SMEs have approached the SME Bank for loans totalling 2.05 billion baht in less than two months.

Entering its 22nd year of operation, TCG has helped 60,000 SMEs, of which 20,000 were able to survive on their own within three to five years.

TCG is aiming for 60 billion baht in SME credit guarantees next year, 80 billion in 2014 and and 100 billion in 2015.

"From now on, we will focus on the amount of SMEs we can help instead of targeting guaranteed value," Mr Wiboon said. "This means we have lots of work to do."

Thailand ranks fifth in Asia in terms of number of businesses guaranteed, after Japan, Korea, Taiwan and Indonesia.

In a related development, 700 businesses are taking part in an Industrial Promotion Department programme to help prepare SMEs for the upcoming Asean Economic Community.

Experts from the private and public sectors will advise the SMEs.

General director Sophon Pholprasit said participating SMEs generate more than 15 billion baht for the economy.

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Writer: Nanchanok Wongsamuth
Position: News Reporter