Goal for SMEs to kick in half of GDP

Goal for SMEs to kick in half of GDP

Somkid pledges a better balance between small and large companies

Deputy Prime Minister Somkid Jatusripitak addresses Friday's 'SME Transform' event at Impact Muang Thong Thani.
Deputy Prime Minister Somkid Jatusripitak addresses Friday's 'SME Transform' event at Impact Muang Thong Thani.

The government has set a lofty goal to raise the contribution of small and medium-sized enterprises to 50% of Thai GDP under the country's 13th national social and economic development plan (2021-25).

Speaking at the "SME Transform" event, Deputy Prime Minister Somkid Jatusripitak said on Friday that the government would develop a better balance between large and small businesses.

"The government aims to upgrade Thai SMEs to play an important role to generate income for the Thai economy in the same way as in developed countries such as Germany, France, Italy and Japan, where SMEs are a crucial engine to generate income," Mr Somkid said.

According to Mr Somkid, at the end of the country's 12th national economic and social development plan (2016-20), the government aims to upgrade the contribution of SMEs to the Thai economy to 45% of GDP.

Currently, SMEs contribute 36% of GDP.

Mr Somkid said the state planning unit, the National Economic and Social Development Board, needs to prepare the 13th national social and economic development plan to focus on how to strengthen small and medium-sized businesses, while the government has pledged to build a proper ecosystem for SMEs and startups.

"SMEs need to transform themselves to become smart SMEs, which apply higher technology and innovation in production processes and upgrade their capability to trade in the global market via online channels," he said, citing China and South Korea as good examples of nations where SMEs use innovation and technology.

Currently there are 3 million SMEs making up 99.7% of Thai businesses. Those SMEs employ 10 million people.

According to Mr Somkid, the incumbent government has enacted many policies to assist SMEs, including a wide range of tax privileges and financial support.

In a related development, the state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) said yesterday that is offering 8 billion baht in cheap loans for small-business operators planning to adopt automation, robotics, information technology and online system to boost capability.

The loans will charge 1% interest, the bank's lowest rate, and will be offered to finance the digital transformation of SME operators, said president Mongkol Leelatham.

Only corporate entities qualify for the loan, and a maximum loan amount of 1 million baht is set for each borrower, he said, adding that the seven-year maturity loan has a three-year grace period for principal payment and does not require collateral.

Moreover, those who occasionally fail to pay debt on time are entitled to the low-rate loan.

The loan is available at the SME Transform event, taking place through Sunday at Impact Muang Thong Thani.

The event aims to prepare Thai SMEs to embrace the challenges inherent in the fast-changing Thailand 4.0 era

In the meantime, SME Bank signed a memorandum of understanding with five organisations on a pilot project to use big data analytics to better assess risks and make faster loan-approval decisions.

The five organisations are the Bank for Agriculture and Agricultural Cooperatives, Krungthai Bank, the Export-Import Bank of Thailand, the Thai Printing Association and Prince of Songkla University.

Do you like the content of this article?