TCG: SME guarantees increase 167%

TCG: SME guarantees increase 167%

Handmade beads on display at the SME Market Fair in Nonthaburi province on Aug 6. The ratio of TCG-backed loan guarantees for SMEs rose by 167% in the first seven months of 2020. (Photo by Arnun Chonmahatrakool)
Handmade beads on display at the SME Market Fair in Nonthaburi province on Aug 6. The ratio of TCG-backed loan guarantees for SMEs rose by 167% in the first seven months of 2020. (Photo by Arnun Chonmahatrakool)

State-owned Thai Credit Guarantee Corporation (TCG) saw the ratio of loan guarantees for small and medium-sized enterprises (SMEs) rise by 167% year-on-year during the first seven months.

The ratio was equivalent to a loan guarantee value of 115 billion baht, said Rak Vorrakitpokatorn, TCG's president.

In addition to high loan guarantees for SMEs, the number of loan guarantee approvals tallied 132,434 copies, up 223% year-on-year for the first seven months.

The figure for new customers receiving loans was 98,221, up 222% year-on-year.

TCG projects to approve more than 150 billion baht worth of loan guarantees and help over 120,000 operators access loans, said Mr Rak.

For March 1 to Aug 17, TCG helped 117,508 SMEs affected by the coronavirus crisis, with loan guarantees valued at a combined 94.7 billion baht.

He said TCG allocated a loan guarantee sum of 50 billion baht for SMEs classified as relegated debtors or debtors on the verge of being classified into the bad loan segment.

TCG is preparing a 150-billion-baht loan guarantee programme called portfolio guarantee scheme 9 (PSG9) for SME operators where the credit line will allow financial institutions to offer loans to 100,000 borrowers with a combined loan value of 100 billion baht.

The programme is expected to commence in October. TCG will place a loan guarantee of around 50 billion baht to assist relegated debtors and those on the verge of being put in the non-performing loan (NPL) segment.

The programme will take control of the group of debtors under the government's debt moratorium scheme once the latter programme ends.

The debt amount under the grace period for principal payment tallies 6.7 trillion baht from a total value of 10 trillion in the banking system.

Of the amount, 40% of SMEs are classified as having risk for an NPL.

The NPL ratio for SMEs is 5.98% of total outstanding loans.

The ratio could be reduced to 5.6% through the TCG's 150-billion-baht loan guarantee programme under PSG9, said Mr Rak.

There are 6 million SME operators at present, of which 3 million are registered, he said.

TCG will provide assistance to SME operators having trouble accessing loans, said Mr Rak.


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