The government is moving ahead with the launch of its first batch of SME soft loans worth 78 billion baht in the first quarter this year, to support the development of digital technologies by small and medium-sized enterprises (SMEs).
Deputy Industry Minister Somchai Harnhiran said the government will launch three financial measures, all from the SME Development Bank (SME Bank), including 50 billion baht in soft loans to support local economies, 20 billion for the SME factor transformation for upgrading machinery, and 8 billion for micro-SME lending.
"We expect all the new measures for SMEs will beef up the country's economy and increase money circulation of 1 trillion baht, up by 5%," he said.
Mr Somchai said the 78-billion-baht budget falls within all measures outlined for SMEs, that has a combined value of 240 billion, which the cabinet approved on Dec 19.
The budget will be passed on to state-owned financial institutions such as Krungthai Bank, Government Savings Bank, the Export-Import Bank of Thailand (Exim Bank) and the Bank for Agriculture and Agricultural Cooperatives, including SME Bank.
Other soft-loan packages will be jointly offered 50 billion baht for KTB, 40 billion baht for GSB, 15 billion baht for BAAC and 5 billion baht for Exim Bank.
Thailand has 3 million SMEs that employ 11 million people. SMEs account for 99.7% of Thai businesses, with some 2.74 million found nationwide.
Mr Somchai said there are non-financial measures to help strengthen SMEs, such as expanding 23 industry transformation centres and setting up 270 SME support and rescue centres nationwide.
The government will provide trainers and create SME big data resources. Local SMEs are also expected to benefit from the government's Big Brother project, in which large firms will guide smaller ones.
"We will develop a digital value chain for SMEs via a business-to-business digital platform, for which the government has support from Japan's Ministry of Economy, Trade and Industry and the government will expand partnership to Indochina countries," he said.
"We want to upgrade SMEs in provincial area via the creative industry village initiative, expecting to increase their income by 25%."
In a related development, Mr Somchai said SME Bank has exited its rehabilitation plan following improved operating performance and declines in its non-performing loans over the past three years.
SME Bank's bad loans have fallen from 32 billion baht of its total loan portfolio, or 40%, in 2014 to 16 billion baht, or 16.8%, in 2017.
Suwanchai Lohawattanakul, director-general of the Office of Small and Medium Enterprises Promotion, expects to expand loans to 300,000 local businesses in 2018.
"The agency has a project to develop new SME products to enter at an international standard, expecting to create new 55,642 SMEs in the first quarter with a value of 1.5 billion baht," he said.
"The government also has ambitions to upgrade SME efficiency to be stronger in the Indochina region on the back of new trends such as digital platforms and e-market places."