Local Economy Scheme aims to save jobs among SMEs

Local Economy Scheme aims to save jobs among SMEs

The Small and Medium Enterprise Development Bank of Thailand (SME D Bank) is joining state efforts to retain 28,800 jobs in SMEs through a new 9.5-billion-baht soft loan programme initiated by the Industry Ministry.

The money, to be granted under the ministry's Local Economy Loan scheme, is expected to help 5,760 businesses struggling with liquidity.

Industry Minister Suriya Jungrungreangkit said prospective borrowers can start submitting loan requests to SME D Bank from this month until December this year.

The scheme was approved by the cabinet on Jan 19.

Officials want the scheme to help businesses increase their liquidity and cash flow, following the latest struggles resulting from the new round of infections.

"If businesses lodge their submissions within February, front-end fees imposed on loan grants will be reduced by 0.5%," said Mr Suriya.

The Local Economy Loan scheme offers each company a maximum 5-million-baht loan, with an annual interest rate of 2.875% for the first three years.

Individual borrowers can request up to 2-million-baht loan, with an annual interest rate of 4.875% for the first three years.

The installment period will last for seven years.

Kobchai Sungsitthisawad, permanent secretary for industry and board chairman of SME D Bank, said the government has upgraded and revised some loan conditions to make the Local Economy Loan scheme accessible to SMEs.

The cabinet agreed to have SMEs that were already granted soft loans, namely under the Policy Loan and the SMEs Transformation Loan, join the Local Economy Loan scheme, he said.

Last year, up to 40 billion baht in soft loans were allocated through SME D Bank for SMEs when nationwide lockdown measures crippled the economy.

The government previously expected this loan amount would help 24,000 businesses create 120,000 jobs and contribute 90 billion baht in economic value.

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