Cabinet approves B50bn loan

Cabinet approves B50bn loan

Business is unusually quiet at Walking Street in Pattaya amid the second Covid-19 outbreak. (Photo by Nutthawat Wichieanbut)
Business is unusually quiet at Walking Street in Pattaya amid the second Covid-19 outbreak. (Photo by Nutthawat Wichieanbut)

The cabinet has approved a 50-billion-baht low-interest loan programme to assist informal workers and small and medium-sized enterprises (SMEs) related to the tourism sector.

Since the new wave of the Covid-19 outbreak resulted in certain areas being placed under stringent control, subsequently affecting people's livelihood and businesses, especially those operating in the tourism sector, the cabinet has approved the roll out of additional measures to alleviate debt shouldered by the people and SMEs, said Finance Minister Arkhom Termpittayapaisith.

The Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives have been approved total loans worth 40 billion baht, with 20 billion disbursed for each bank, to provide support for informal workers affected by the outbreak.

A flat interest rate of 0.1% per month is applied to this loan programme, while the grace period for repaying the principal and interest is extended to 12 months from six months, the normal repayment period stipulated by both state-owned financial institutions.

The loan period covers three years and borrowers can seek to obtain loans until June 30.

Another loan scheme with a total credit line of 10 billion baht has been approved for the GSB. The programme is designed to provide low-interest loans for tourism-related businesses and those designated as supply chains of the tourism sector.

The qualifications for receiving this loan are having vacant lands or land and buildings with title deeds as collateral and borrowers do not have to check their credit with the National Credit Bureau.

The credit line per individual does not exceed 70% of the government's land appraisal value, with the maximum credit line capped at 50 million baht.

Loan terms are comprised of a three-year loan period with step-up interest rates at 0.1%, 0.99% and 5.99% per year for the first, second and third years, respectively. Borrowers can seek to obtain these loans until June 30.

The Finance Ministry expects the loans will help ease the financial burden shouldered by the people and solve the liquidity crunch faced by SMEs in order for firms to retain employees, said Mr Arkhom.

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