Thai Cabinet approves 55 billion baht lifeline for SMEs and tourism

The Thai Cabinet approved a low-interest loan programme worth 5 billion baht and a substantial 50 billion baht credit guarantee fund under the Ignite Thailand vision, aimed at bolstering small and medium-sized enterprises (SMEs).

Deputy Finance Minister Paopoom Rojanasakul detailed the plan, highlighting that the low-interest loans would target tourism, wellness and medical, and agriculture and food sectors. Each borrower can access up to 10 million baht with a 10-year loan term, starting at an interest rate of 2.5% per annum for the first two years, alongside a six-month principal repayment grace period.

“These loans will help targeted industries enhance their business capabilities, propelling Thailand to the forefront of global industrial hubs.”

The Ignite Thailand vision includes eight key areas, focusing on boosting tourism, where Thailand ranks eighth worldwide for foreign visitors, generating an impressive 2.3 trillion baht annually. Notably, health tourism alone brought in 40 billion baht last year.

Additionally, government spokesperson Chai Wacharonke announced the approval of the new Portfolio Guarantee Scheme (PGS 11) worth 50 billion baht. This scheme, managed by the Thai Credit Guarantee Corporation (TCG), guarantees commercial bank loans up to 40 million baht per borrower for a maximum of 10 years. The guarantee fee is set at 1.75% for the entire contract duration, covering up to 30% of the loan amount.

The PGS 11 is expected to benefit 76,900 SMEs, generating an estimated 60 billion baht in credit. Paopoom highlighted that while large businesses saw a 3.3% loan growth last year, loans under 500 million baht dropped by 5.1%, underscoring the challenges SMEs face in accessing credit.

Thienprasit Chaiyapatranun, President of the Thai Hotels Association (THA), welcomed the initiative.

“The 2.5% interest loans are a lifeline for small hotels struggling to resume operations.”

He urged for funds to assist hotels classified as non-performing loans (NPLs) yet regularly making interest payments, reported Bangkok Post.

In related news, Thailand’s ambition to become the leading aviation hub in the region by 2030 may face significant delays due to global supply chain disruptions, according to the International Air Transport Association (IATA). The country needs to remove unnecessary regulations and accelerate digitalisation efforts to improve aviation efficiency.