Recovery stimulus coming together

Recovery stimulus coming together

Employment and SMEs key priorities

People adhere to social distancing while queuing at a Government Savings Bank branch in a shopping mall. Varuth Hirunyatheb
People adhere to social distancing while queuing at a Government Savings Bank branch in a shopping mall. Varuth Hirunyatheb

The Finance Ministry is gearing up to launch both financial and non-financial measures aimed at revitalising the economy once the pandemic is under control.

The stimulus package prioritises job creation in the local economy, said Finance Minister Uttama Savanayana.

The measures call for specialised financial institutions including Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives, the Small and Medium Enterprise Development (SME D) Bank and the Thai Credit Guarantee Corporation (TCG) to take care of small entrepreneurs and underground borrowers.

"These preparations will enable economic recovery efforts to begin rapidly," he said.

"The stimulus measures are necessary because the economy cannot jump-start immediately after the pandemic is contained."

The plan aims to strengthen the local economy, the farming industry and the enterprise community; prevent loan shark problems from snowballing; and decrease underground lending.

To urge commercial banks to offer SME loans, Mr Uttama summoned TCG to outline loan guarantee guidelines as the portfolio guarantee scheme (PGS) 8 deadline has already passed, he said.

TCG president Rak Vorrakitpokatorn recently said the agency will propose front-loading bad loan coverage under the 200-billion-baht PGS 9 at 5-7% in the first year, encouraging lenders to extend new loans to SMEs amid the lingering pandemic.

Mr Uttama said job creation using non-financial measures aligns with other ministries' plans, including the Education Ministry, which will be responsible for seeking jobs for new graduates.

The Finance Ministry plans to set up a fund to help SMEs access funding after many operators complained the Bank of Thailand's soft loans, totalling 500 billion baht, remain out of reach, he said.

To pump money into business operators rapidly, existing bank customers are the soft loan scheme's targeted group, said Mr Uttama.

The Fiscal Policy Office is in the process of establishing the fund with up to 50 billion baht to extend loans to small business operators who fail to access the soft loans, he said.

For Thai Airways International's rehabilitation plan, Mr Uttama said Chakkrit Parapuntakul, deputy permanent secretary for finance and the flag carrier's acting president, told Mr Uttama the company is in negotiations with creditors and can manage liquidity for the time being.

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