The state-owned Thai Credit Guarantee Corporation (TCG) yesterday announced its performance during the first six months of this year, with the agency guaranteeing loans for small and medium-sized enterprises (SMEs) worth 67.9 billion baht, representing 72% of its annual target.
In the second half of this year, TCG is expected to be able to continuously extend credit guarantees to achieve its annual target of 95 billion baht. Of the total SMEs to have applied for a loan guarantee, 40% are based in Bangkok, while the remainder are located in other provinces.
Non-performing credit guarantees (NPGs) account for around 7% of the outstanding credit guarantee amount of 800 billion baht at present, down from 10% during the pandemic due to a larger TCG portfolio.
TCG reviewed its credit guarantee policy as well as its credit risk management policy to ensure an appropriate and adequate risk management process. In light of this, follow-up measures to reduce NPG debt, particularly debt restructuring for SMEs, were implemented in order to define corrective measures for NPG debt. As a result, the cumulative amount of claims over the past 30 years is at 5% of the accumulated credit guarantee amount.
TCG, a state-owned specialised financial institution governed by the Ministry of Finance, was established to provide support to SMEs through a loan guarantee service for firms that have potential but lack collateral, in order to enable them to gain wider access to financial sources.
Sittikorn Direksoonthorn, president of TCG, said the credit guarantees which the agency approved during the first six months of the year enabled 51,000 SMEs to access loans worth 76 billion baht and retain 493,000 job positions.
The guarantees generated economic benefits worth 280 billion baht, according to TCG.
The top sectors given guarantees (in the first six months of this year) were service, accounting for 31% of its portfolio, followed by farming at 11%, and manufacturing and trade at 10%.
Part of the credit guarantees of 67.9 billion baht fall under the Portfolio Guarantee Scheme 10 (PGS10) project, initiated by the Finance Ministry to help SMEs access loan guarantees on a lower cost basis. TCG currently charges a loan guarantee fee of 1.75% of the guaranteed amount. Under the scheme, the government subsidises the loan guarantee fee of 1%.
According to its first-half performance, TCG extended loan guarantees worth 24.7 billion baht through the PGS10.
Focusing on providing credit guarantees for SMEs using technology or innovation in business, particularly those adopting environmental, social and governance (ESG) practices, the programme is subject to financial limit of 50 billion baht, a two-year guarantee period, and an expiry date of Feb 27, 2025.