Osmep requests expanded credit guarantees for SMEs

Osmep requests expanded credit guarantees for SMEs

The Office of Small and Medium Enterprises Promotion (Osmep) has proposed that the cabinet expand credit guarantee coverage for small and medium-sized enterprises to as much as 50%, up from 40% now.

According to Wimonkan Kosumas, Osmep's deputy director-general, the committee handling SME promotion yesterday assigned Osmep to study the possibility of raising credit guarantee coverage for SMEs to 50%.

In fact, the cabinet already green-lighted a new aid package for SMEs, including an increase of credit guarantee coverage from 30% to 40%, on Jan 7.

The aid package was offered based on SMEs' characteristics.

Under the January aid package, SMEs were classified into three groups: those who want to access financial sources but cannot, those whose debts have turned sour, and those who can access financial institution lending but need additional liquidity.

Thai Credit Guarantee Corporation offered a 60-billion-baht credit guarantee facility to the first group for up to 50,000 SMEs, while enlarging credit guarantee coverage for them from 30% to 40%. A debt restructuring programme was offered to the second group, covering about 20,000 SMEs.

The SME Development Bank will offer local-economy loans worth 20 billion baht to the third group and 5 billion baht in lending to micro SMEs at 1% interest with a seven-year grace period.

Ms Wimonkan said the Finance Ministry has proposed enlarged credit guarantees because the Thai economy remains in peril after the coronavirus outbreak.

In related news, Osmep yesterday lowered its forecast for SMEs' contribution to the country's GDP to 2.7% this year from 3.5% in the previous forecast, citing the negative impact of the virus crisis on Thai SMEs.

Tourism SMEs make up half of the total SMEs nationwide.

Thailand has roughly 3 million SMEs and startups, including community enterprises.

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