The Finance Ministry and the Bank of Thailand are considering looser terms for loan guarantees for the central bank's soft loan scheme, aiming for easier access for small and medium-sized enterprises (SMEs), says a ministry source who requested anonymity.
The central bank introduced the 250-billion-baht loan scheme last year through financial institutions to assist pandemic-battered SMEs. Of the total, 200 billion baht has been extended to SMEs.
The source said under the new guidelines, the Thai Credit Guarantee Corporation's (TCG) conditions might be adjusted so that loan guarantees were more broadly applied in the scheme.
TCG charges an annual guarantee fee of 1% of the loan value under this scheme, lower than its normal charge of 1.75%.
The decision to make changes came at a recent meeting of the Office of the National Security Council, chaired by the prime minister, to prepare plans to deal with the economy and energy prices.
The ministry is also considering short-term measures to further mitigate the impact of rising energy prices, said the source.
The source said the country's fiscal status is still healthy, despite massive borrowing of 1.5 trillion baht under two emergency loan decrees during the pandemic.
The government also raised the ceiling of the public debt-to-GDP ratio to 70% from 60% to give it more fiscal room. Thailand's debt-to-GDP ratio stood at 10.1 trillion baht in May, representing 60.9% of GDP.
Over the past week, TCG asked the Finance Ministry to endorse its plan to launch Portfolio Guarantee Scheme 10 (PGS10), with the aim of helping SMEs access its loan guarantees on a lower-cost basis.
PGS9, which is due to expire in November, provided guarantees worth 150 billion baht.
The government subsidised the loan guarantee fee for SME borrowers for three years, with a loan guarantee of up to 10 years.