SME fund unlikely to get nod, warns deputy PM

SME fund unlikely to get nod, warns deputy PM

A plan to set up an SME fund to help micro-enterprises is likely to be scrapped after Deputy Prime Minister Supattanapong Punmeechaow said on Friday that the government has no policy to establish a specific fund to support SMEs.

He said there is sufficient liquidity in place in the market.

"I would prefer small and medium-sized enterprises (SMEs) conduct debt restructuring, which is considered a more proper solution to address their debts," Mr Supattanapong said.

The 50-billion-baht fund was proposed by former deputy prime minister Somkid Jatusripitak in June, as he wanted to offer a new soft loan option for SMEs to reinvigorate their business and recover from lockdown measures.

There are 3.3 million SMEs, and most have little or no access to loans from local banks.

Mr Supattanapong said the central bank is offering a 500-billion-baht soft loan scheme for SMEs affected by the coronavirus. The scheme is part of the third phase of relief measures. Under the two-year loan scheme, the central bank will charge commercial banks 0.01% interest to re-lend to SMEs at 2% with a maximum credit line of 500 million baht.

The government will absorb interest costs for six months for SMEs that receive soft loans.

SMEs eligible for the measure must operate domestically, be non-listed companies and still have serviced debt or made late payments within 90 days of the end of 2019.

Aside from the soft loans, all SMEs with a credit line of up to 100 million baht will be automatically offered a six-month grace period on principal and interest to alleviate the impact on small and mid-scale SMEs, which are an important source of employment.

The soft loan scheme has lent just 100 billion baht to SMEs so far.

Yesterday, the SME Promotion Committee chaired by Prime Minister Prayut Chan-o-cha approved a 1.11-billion-baht budget to support SMEs in fiscal 2021. The budget will focus on developing new entrepreneurs and micro-SMEs, upgrading data for 216,562 SMEs and creating 3.88 billion baht in revenue.

Gen Prayut also ordered each province to revise budget requests for the state's 400-billion-baht spending plan for social and economic rehabilitation.

Up to 50,000 projects proposed by provinces are lined up for the budget.

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