Osmep chases funds for SMEs

Osmep chases funds for SMEs

Stalls inside the SME Market Fair at the Government Complex on Chaeng Watthana Road yesterday. Arnun Chonmahatrakool
Stalls inside the SME Market Fair at the Government Complex on Chaeng Watthana Road yesterday. Arnun Chonmahatrakool

The Office of Small and Medium Enterprises Promotion (Osmep) is looking for new financing sources for firms after a plan to set up a novel fund to help SMEs survive the pandemic is likely to miss out on funding from the state's 400-billion-baht economic and social rehabilitation scheme.

On Aug 19, Osmep officials will discuss alternatives with the agency's board, then forward them for consideration to the new cabinet.

Osmep chief Veerapong Malai said the fund, worth 50 billion baht, was to help SMEs better access soft loans as many of them fail to qualify for loans from commercial banks, usually based on strict conditions.

The state legal advisory body, the Council of State, said Osmep cannot use money from the 400-billion-baht package because of legal complications.

"The fund is restricted by conditions for projects that must be financed by the relief package," Mr Veerapong said. "Osmep expects the board will find another way to help SMEs and find a new budget."

If the board and the new cabinet cannot come up with a new solution, Osmep fears many Thai SMEs will be unable to survive the crisis.

The 50-billion-baht fund was proposed by former deputy prime minister Somkid Jatusripitak in June as he wanted to offer a new channel of soft loans for SMEs to reinvigorate their businesses, which have borne the brunt of lockdown measures.

There are 3.3 million SMEs and most of them gained little or no access to loans from local banks.

The government usually approves an annual 1-billion-baht budget for Osmep to support 200,000 SMEs. For fiscal 2021, the government decided to cut the budget by 5%.

"The annual budget is not enough to help SMEs," Mr Veerapong said. "This is in conflict with the government's policy to prioritise support for local businesses first."

In addition to finding finance, Osmep is helping more than 46,000 SMEs sell their products and services through online and offline channels under its Connext scheme, which links businesses with markets and prospective customers. The scheme is expected to create economic value worth 13 billion baht.

Osmep hopes to help SMEs expand their markets to China, Japan, South Korea, India, the Philippines, Cambodia, Laos, Myanmar and Vietnam. The office also plans to organise 37 trade shows across the country.

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