SME Bank deadline extended
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SME Bank deadline extended

Deputy Prime Minister Somkid says the government is serious about supporting SMEs as a major economic growth driver. SOMCHAI POOMLARD
Deputy Prime Minister Somkid says the government is serious about supporting SMEs as a major economic growth driver. SOMCHAI POOMLARD

The state-run Small and Medium Enterprise Development Bank of Thailand (SME Bank) has pushed back the application deadline for its 15-billion-baht policy loan scheme to the end of June after only a third of the money was taken out.

Senior executive vice-president Surachai Kampalanonwat attributed the tepid demand to the more attractive conditions offered by the government's 150-billion-baht soft loans to small and medium-sized enterprises (SMEs).

The deadline extension has already won cabinet approval.

The policy loans, initiated by former deputy prime minister MR Pridiyathorn Devakula, are targeted at SMEs battered by the stalling economy, innovative small businesses with the potential to grow into medium-sized ones and SMEs focused on neighboring countries.

SME Bank charges 4% per year for the first three years, while the rate for the fourth and fifth years are set by the bank.

The policy loan's original application deadline was the end of last year.

In comparison, the Government Savings Bank (GSB) extended all of its 100 billion baht in soft loans to commercial and other state-run banks at 0.1% interest. Those banks relend the money to SME operators at a 4% rate throughout the seven-year term.

With these soft loans fully drawn down within just a few months and strong pent-up demand remaining, the GSB last month extended a new lot of 50 billion baht, all of these were taken out.

Mr Surachai said as of Monday, 5.44 billion of SME Bank's 15 billion baht in policy loans had been taken out by 1,610 SME operators, averaging 3.3 million baht.

For potential borrowers wanting a credit guarantee from the Thai Credit Guarantee Corporation so they can seek a higher borrowing amount, that agency will waive the 1.75% annual fee for the first year and charge 1% in the second and third years, he said.

Meanwhile, Deputy Prime Minister Somkid Jatusripitak announced the One Tambon One Smart Farmer scheme aimed at turning farmers into SME operators.

The idea is to upgrade farmers' plantations, production technology and know-how to address low farm prices in the long term.

The government will designate one "smart farmer" in each tambon who can guide his fellow farmers in the community, Mr Somkid said.

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