The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) is offering low-rate loans worth a combined 58 billion baht to family-owned business operators turned juristic persons, farm processing entrepreneurs and innovative small-business operators.
Of the 58 billion baht in loans, 8 billion is set to be extended to small SMEs that sign up to become juristic entities, with the remainder to SMEs in the agricultural processing industry, community-based tourism, community enterprises and businesses that use innovation, said SME Bank president Mongkol Leelatham.
For the 8-billion-baht loan scheme, the bank charges borrowers 1% throughout the seven-year loan term, with a three-year grace period on the principal. Borrowers do not need collateral, and those who have failed to repay bank loans once are still eligible for the loan.
Each borrower can apply for a maximum loan amount of 1 million baht, Mr Mongkol said, and SME Bank will take seven days for the loan approval process.
The bank is imposing a fixed 3% interest rate for three years for the 50-billion-baht seven-year term loans, he said. If borrowers lack collateral, they can ask to use the credit guarantee service from Thai Credit Guarantee Corporation (TCG), which also offers an annual fee exemption for the first four years.
Both loan schemes are aimed at helping micro-entrepreneurs towards sustainable growth, Mr Mongkol said.
The bank has already approved 2-3 billion baht in loans for SME juristic persons that shifted from family-owned firms and owner-operators, while 10 billion out of the 50 billion baht has been extended.
SME Bank is also offering two batches of loans worth 1 billion and 2 billion baht, respectively, to aid promising SMEs facing financial troubles.
Both loans are being supervised by the Office of Small and Medium Enterprise Promotion (Osmep), and there have been 36,000 applicants so far.
Mr Mongkol said the slow pace of the two loans' approval could be attributed to a lack of clarity and the limited number of Osmep staff.
To extend loans faster, SME Bank and the Federation of Thai SMEs have agreed to combine both into a single loan scheme.