TCG to up guarantees for SME financing
published : 7 Sep 2019 at 04:00
newspaper section: Business
writer: Wichit Chantanusornsiri
State-owned Thai Credit Guarantee Corporation (TCG) has been instructed to provide 70 billion baht worth of loan guarantees under the 150-billion-baht Portfolio Guarantee Scheme 8 (PGS8) for the remainder of the year as an engine to boost economic growth.
Deputy Finance Minister Santi Promphat said PGS8 enables small and medium-sized enterprises (SMEs) to more easily access bank loans at reasonable cost.
Interest rates for loans guaranteed by TCG depend on each participating bank, with the lowest rate at 4%.
TCG yesterday signed agreements with 18 commercial banks participating in PGS8, under which the state-owned agency will share losses of up to 30% (versus 24.5% in normal cases) to encourage lenders to extend more loans to SMEs.
Of the total 150 billion baht, 40 billion is set for low-rate SME loans from Krungthai Bank and Government Savings Bank, 10 billion is for SMEs with a single financial account, 2 billion each is for the SMEs Supply Chain Franchise scheme and SMEs that are cooperatives, and the remaining 3 billion is for SMEs that have a letter of guarantee issued by state agencies.
SMEs that are cooperatives and those with a letter of guarantee are exempt from an annual credit guarantee fee for three years. Those under the other three schemes are subject to the fee exemption for two years.
Apart from higher loss-sharing, the ceiling guaranteed loan value under PGS8 is raised to 100 million baht per SME from 40 million.
So far, a mere 8% of SME loans guaranteed by TCG have turned sour, said president Rak Vorrakitpokatorn. He said TCG has educated SME borrowers on lowering non-performing loans.
Mr Rak said PGS8 will help TCG achieve its full-year target for loan guarantees of 100 billion baht after issuance of 60 billion baht worth of guarantees so far this year.
Moreover, at least 43,000 SMEs are expected to tap loans guaranteed under PGS8, he said.
There are 5.2 million micro businesses and SMEs in Thailand, but only 1.2 million can access loans from financial institutions, Mr Rak said.
TCG has provided loan guarantee service to 500,000 SMEs since its formation 28 years ago.
- Keywords
- billion
- billion baht
- loans
- guarantee






