State-owned Thai Credit Guarantee Corporation (TCG) plans to launch Portfolio Guarantee Scheme 10 (PGS10) later this month, aiming to help small and medium-sized enterprises (SMEs) access loan guarantees on a lower cost basis.
The scheme is meant to provide cover for street vendors up to mid-sized enterprises, said TCG president Sittikorn Direksoonthorn. In terms of value, PGS10 ranges from 10,000 baht up to 40 million baht per borrower, he said.
The cabinet approved the programme late last month for guarantees worth 50 billion baht up to a maximum of 10 years.
The agency expects the value of its loan guarantees to reach 30 billion baht within a few months of the launch, Mr Sittikorn said.
Under the PGS scheme, the government provides financial support to TCG, enabling the agency to charge customers a lower fee.
The PGS10 scheme divides customers into six groups, with varying fees charged depending on the category. One group includes startups, fresh graduates, freelancers, and SMEs that have never applied to a financial institution before. The scheme offers a guarantee of up to 100,000 baht per customer for this group.
The annual fee for this group is 3% of the loan amount guaranteed. The fee is waived for the first two years, then TCG and the customer each pay half of the guarantee fee for the duration of the guarantee term. The agency set aside guarantees worth 1 billion baht for this group in the initial stage.
For small merchants, TCG offers guarantees of up to 200,000 baht per customer with an annual fee of 1.75% of the guaranteed amount and a fee waiver for the first two years. The agency allocated 3 billion baht for this group in the initial stage.
TCG offers guarantees of up to 40 million baht per borrower to SMEs registered as an individual. The annual fee is 1.75% of the guaranteed amount and a fee waiver for the first two years. The agency reserved 10 billion baht for this group in the initial stage.
For SMEs registered as a juristic entity, the agency offers loan guarantees of up to 40 million baht with an annual fee of 1.25%, waived for the first three years. The agency reserved 15 billion baht for this group in the initial stage.
For SMEs wanting to adopt environmental, social and governance (ESG) practices, TCG is offering loan guarantees of up to 40 million baht with an annual fee of 1.5% of the guaranteed amount and a waiver for the first four years. The agency reserved 500 million baht for this segment.
The PGS10 scheme closes on Feb 27, 2025. It is expected to generate economic benefits of 200 billion baht and help 700,000 workers retain their jobs.
Mr Sittikorn said TCG wants to extend loan guarantees worth 170 billion baht this year, with 15 billion extended in the first two months this year.