BAAC to revise loan goal as farm sector stagnant

BAAC to revise loan goal as farm sector stagnant

BAAC says it needs to focus more on mobile communication with its customers because of the outbreak.
BAAC says it needs to focus more on mobile communication with its customers because of the outbreak.

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) is poised to revise its new lending target of 101 billion baht for this financial year, starting from April 1, because of knock-on effects from the Covid-19 outbreak on the farming sector.

BAAC's operating performance for the 2019-20 financial year that ended March 31 was not affected by the virus, said Somkiat Kimawaha, BAAC's executive vice-president.

Effects from Covid-19 can be felt in many sectors, including financial institutions, said Mr Somkiat.

The novel coronavirus spread has blocked farmers in eastern Thailand from shipping their products, making it more difficult for local buyers to access their products, he said.

The state-backed farm bank recently set a goal of 6.7% growth in its new lending for this financial year to 101 billion baht.

Mr Somkiat said the bank needs to change the main channel used to communicate with customers from letting its branch staff visit customers to a mobile banking app after the virus spread.

For financial assistance to BAAC's customers, the bank is offering an emergency loan that will cap lending at 10,000 baht for each borrower, and a special loan capped at 50,000 baht each in compliance with the Finance Ministry's measures, in addition to the debt suspension on principal and interest rate reduction to those ravaged by the drought.

The two batches of loans worth 20 billion baht in total will open for application from April 15.

To align with the government's physical distancing measures, the bank will allow customers to apply for these loans online, he said.

The bank will charge 0.1% interest per month for those who secure the emergency loan and 0.35% per month for the special loan scheme. Both offer a six-month deferment period on principal and interest to borrowers, and their repayment period has been set at two years.

Regarding the third phase of the government's relief measures, BAAC will take part in helping to boost the income of workers who left Bangkok for their hometowns after malls and entertainment venues in the capital closed to contain the virus, said Mr Somkiat.

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