Thailand to launch 50 billion baht SME support scheme

Thailand’s Ministry of Finance is set to endorse a new credit guarantee scheme, known as PGS 11, with a funding pool of 50 billion baht (US$1.4 billion baht). This initiative, revealed by Radaklao Intawong Suwankiri, the Deputy Government Spokesperson, is designed to bolster small and medium enterprises (SMEs) in three key industries.

Radaklao announced today that Krissada Chinavicharana, the Deputy Finance Minister, is preparing to present this financial measure to the Cabinet for approval. The programme is an integral part of the IGNITE Thailand policy, spearheaded by Prime Minister and Finance Minister Srettha Thavisin, aiming to make Thailand a regional leader across eight strategic hubs.

Krissada has directed the Government Savings Bank to prepare a package of low-interest loans to enhance liquidity or to finance upgrades and expansions for SMEs within three industrial sectors crucial to achieving the objectives of the IGNITE Thailand policy. These sectors include (1) Tourism Hub, (2) Wellness & Medical Hub, and (3) Agriculture & Food Hub. The proposed measures are expected to increase SMEs’ competitiveness in the current market, while also stimulating investment and job creation, reported KhaoSod.

The PGS 11 scheme, managed through Specialised Financial Institutions (SFIs), will see the Credit Guarantee Corporation for Small Industries (CGCSI) provide much-needed support to SMEs. This move aligns with the government’s broader strategy of driving Thailand to the forefront of the regional economy, focusing on enhancing the country’s standing in tourism, health and wellness, and agricultural and food industries.

In related news, the Bank of Thailand is contemplating the establishment of credit guarantee schemes for small and medium-sized enterprises (SMEs) to enhance their access to bank loans. Suwannee Jatsadasak, assistant governor for the supervision group, stated that the central bank is analysing various credit guarantee schemes implemented in other countries, including Japan and Taiwan.

These nations offer more extensive credit guarantee packages to SMEs than Thailand, based on the mutual sharing of benefits and risks between businesses and financial institutions. Therefore, these schemes necessitate less government budget support.