B3bn in SME loans issued for 2020

B3bn in SME loans issued for 2020

The Industry Ministry plans to provide soft loans worth 3 billion baht under the Pracha Rat scheme for small and medium-sized enterprises (SMEs) in 2020.

The loan scheme is focused on businesses in the agriculture, creative and digital sectors, offering an interest rate of 1% per year for seven years, said Industry Minister Suriya Jungrungreangkit.

Each borrower can borrow a maximum of 3 million baht.

The soft loan is part of the 20-billion-baht Pracha Rat fund, aimed at helping SMEs.

Since 2017, the government has provided soft loans under the Pracha Rat fund to 10,567 SMEs for a combined amount of 16.1 billion baht.

The Pracha Rat fund has a balance of 3.8 billion baht.

SMEs can apply the soft loan for investment or as working capital, starting from Dec 15, he said.

There is also a 750-million-baht new development project to sharpen SMEs' competitiveness, said Mr Suriya.

"The ministry wants to support and help SMEs increase efficiency, productivity, quality, training programmes and marketing," he said.

Trade tensions between the US and China have continued to stall global and domestic economies, said Mr Suriya.

Many businesses are struggling with slow growth and cannot access loans from financial institutions, he said.

"The government wants to help SMEs access funding at low interest rates. The ministry expects the 3 billion baht in loans will result in more than 10 billion circulating in the domestic economy," said Mr Suriya.

He said SMEs are the backbone of the domestic economy, boosting employment and leading to income distribution.

SMEs are the main factor driving economic growth as they account for up to 70% of the country's GDP, said Mr Suriya.

He said the Thailand 4.0 initiative is expected to push forward the country's economy and improve SMEs' efficiency.

The cabinet recently approved an SME stimulus package that includes a credit guarantee by state-owned Thai Credit Guarantee Corporation (TCG) and credit lines through state banks worth a combined 100 billion baht.

The ministry has also ordered the Office of Small and Medium Enterprises Promotion to help SMEs and micro-SMEs access funding sources.

In addition, Deputy Finance Minister Santi Promphat has instructed TCG to provide 70 billion baht worth of loan guarantees under the 150-billion-baht Portfolio Guarantee Scheme 8 for the remainder of the year as an engine to increase economic growth and assist struggling small business operators.

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