Thai Credit Guarantee Corporation (TCG) is proposing the Bank of Thailand consider expanding the level of loans TCG is guaranteeing for borrowers of the amended soft loan scheme from 100 billion baht as the guaranteed amount is nearing the ceiling.
TCG acting general manager Wasukarn Visansawatdi said the central bank asked TCG to guarantee up to 100 billion baht of the Bank of Thailand's soft loan scheme worth 250 billion, allocated to help businesses and individuals survive the impact of the Covid-19 pandemic.
Mrs Wasukarn said TCG has provided a guarantee of 50 billion baht under the scheme, covering 17,000 borrowers.
With loan grants pending of around 24 billion baht for the central bank scheme, this indicates the guarantee level is close to reaching the 100-billion-baht limit soon, she said.
The central bank determines if the guarantee limit is expanded, said Mrs Wasukarn.
On Wednesday, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) proposed an increase of loan guarantees for TCG under the soft loan scheme from the existing guarantee ratio at 40% of the total credit line to 70%.
This incentive should only be offered to small and medium-sized enterprises affected by Covid-19, said JSCCIB.
Mrs Wasukarn said such an increase depends on the discretion of the Finance Ministry.
The central bank's amended soft loan scheme began on April 26 this year and is scheduled to end on Oct 9, 2023.
The maximum guarantee is 150 million baht per borrower, with a maximum guarantee term of 10 years.
The guarantee fee is 1.75% per year.