Following the pandemic, the number of credit guarantee clients has increased to 800,000, primarily due to efforts to help small and medium-sized enterprises (SMEs) access more credit within the system, according to the head of the Thai Credit Guarantee Corporation (TCG).
Sittikorn Direksoonthorn, president of the TCG, said during 2020-21, TCG's credit guarantee clients numbered only 400,000.
He attributed the doubling of credit guarantee client numbers post-pandemic to higher demand for loans from SMEs which need credit to boost their liquidity while financial institutions remain concerned about loan quality, leading to the involvement of the TCG to provide guarantees.
He said the new portfolio guarantee scheme (PGS 11), which the cabinet approved with a guaranteed budget of 50 billion baht for SMEs, is expected to utilise around 30 billion baht of this budget this year.
PGS 11 is a credit guarantee project for SMEs supported by the government to drive the economy and elevate Thailand to a global industrial hub in accordance with the government's Ignite Thailand vision in eight areas: tourism, medical and health, food, aviation, regional transport, future automotive manufacturing, digital economy, and finance.
It also supports SMEs engaged in social and environmental businesses, with guarantees of up to 40 million baht per client.
Under the PGS Phase 11 project, the fund is allocated to assist target SME groups under the government's Ignite vision and green policies as follows:
1. TCG SMEs Ignite Biz offers a total guarantee budget of 10 billion baht for corporate SMEs operating in the ISIC Code groups defined by TCG, according to the Ignite Thailand vision, which covers eight areas: a tourism hub, a wellness and medical hub, an agriculture and food hub, an aviation hub, a logistics hub, a future mobility hub, a digital economy hub, and a financial hub.
Each guarantee application must be at least 200,000 baht, with a maximum of 10 million baht per client.
2. TCG SMEs Ignite One, with a total guarantee budget of 7 billion baht for individual SMEs operating in the ISIC Code groups defined by TCG, according to the Ignite Thailand vision, which covers eight areas. Each guarantee application must be at least 200,000 baht, with a maximum of 5 million baht per client.
3.TCG SMEs Smart Green, with a total guarantee budget of 1 billion baht for both corporate and individual SMEs that receive loans under the environmental support product programme from financial institutions. Each guarantee application must be at least 1 million baht, with a maximum of 40 million baht per client.
For the credit guarantee performance from January to June, 45,440 SMEs were helped to access credit. Of these, 94% were micro enterprises, with an average loan guarantee of 80,000 baht per client. The remaining 6% were SMEs with an average loan guarantee of 5.31 million baht per client.
The total approved loan guarantees amounted to about 19 billion baht, preserving 168,762 jobs, generating 19.6 billion baht in loans within the system and creating 76.7 billion baht in economic benefits.
The top three sectors with the highest credit guarantees were: services (27.5%), manufacturing and other trade (13.5%), and food and beverages (9.6%). These three categories accounted for 51% of the guarantees or about 9.6 billion baht in value terms.
The sectors with the fourth to sixth highest credit guarantees were: consumer goods (9.5%), automotive industry (8.5%) and agriculture (8.2%).
Some 40% of the credit guarantees were distributed in Bangkok and its metropolitan area, with the other 60% in other regions comprising 18% in the Northeast, 13% in the South, 12% in the North, 9% in the East, 5% in the Central region and 3% in the West.
Additionally, more than 15,000 SMEs participated in debt restructuring and received debt settlements between April 2022 and June 2024, with the total debt amounting to over 7 billion baht.
In the second half of the year, TCG aims to drive the economy and help SMEs access credit, focusing on vulnerable groups, environmentally-conscious businesses, new entrepreneurs and startups, and businesses in the eight targeted industries under the government's Ignite Thailand policy, according to Mr Sittikorn.
