FTI jittery over third wave's impact on SMEs
The Federation of Thai Industries (FTI) has raised concerns over the impact of the third Covid-19 outbreak on small and medium-sized enterprises (SMEs) despite the state's attempts to help them gain better access to soft loans through a scheme under the Bank of Thailand.
Many SMEs, especially those working in tourism, restaurants and manufacturing sectors, still found it difficult to obtain loans from commercial banks as the third wave of Covid-19 dealt a further blow to their businesses, said FTI vice-chairman Kriengkrai Thiennukul.
Last year, the central bank launched a relief measure to extend 500 billion baht in soft loans at 0.01% interest to financial institutions for two years.
Financial institutions will then pass on the loans to SMEs at a concessional rate of 2%.
However, commercial banks were reluctant to issue loans out of a worry over slow recovery of SMEs, FTI said earlier.
"We want financial institutions nationwide to relax their strict loan request conditions for SMEs which badly need money to cope with the third outbreak of the contagion," said Mr Kriengkrai.
The central bank later amended the soft loan scheme, now worth 250 billion baht. It will allow a maximum debt guarantee coverage from the Thai Credit Guarantee Corporation of 40% of the total credit line offered to a commercial borrower, up from 30% earlier.
This will provide more opportunities for higher-risk SMEs to access the loan programme.
On March 23 the cabinet approved financial relief measures worth 350 billion baht to help the business sector recover from Covid-19 after the 500-billion-baht aid programme underperformed.
The measures included 250 billion baht worth of soft loans provided by the central bank and another 100 billion baht for asset warehousing to assist debtors who are unable to repay loans.
While recognising the state attempts to help affected businesses, Mr Kriengkrai suggested the government consider launching "emergency measures" to help entrepreneurs.
"It's great the government is trying to support SMEs, but it needs to come up with more measures to help them," he said.
The government may need to borrow an additional 1 trillion baht to address the impact of the coronavirus pandemic, the FTI had said earlier.