Central bank ready to launch soft loans
PHUKET: The Bank of Thailand (BoT) – the country’s central bank – decided yeterday to establish a system allowing tsunami-affected businesses to get soft loans at interest rates of no more than 2% a year.
These loans would be channeled through the country’s commercial banks, which would repay the BoT at a rate of just 0.01% a year, Prasuksup Puangsokorn, Division Executive in the BoT’s credit and refinancing division, told the Gazette.
But this loan plan has yet to become reality. Banks are not obliged to join the scheme; those that do so must collate information on borrowers seeking post-tsunami loans and submit this information to the BoT before February 28.
K. Prasuksup said that the BoT would give loan requests from commercial banks top priority, disbursing the funds within a day of receiving a request.
In the meantime, however, most commercial banks continue to offer loans at the same rates as before the tsunami – 5% to 8% a year.
The soft loans scheme has not been greeted with universal enthusiasm. ML Vitaya Chakrabandhu, owner of Le Meridien Khao Lak, which suffered damage from the wave estimated at 500 million baht, criticized the government for not being supportive enough.
“We urgently need a loan to rebuild the hotel. We know that the government is going to offer soft loans, but we’ve found that it is very difficult to get such a loan quickly, and the rate [of 2%] is too high,” he said.
“We asked for a reconstruction loan [from our bank] in the week after the tsunami, but it has still not been approved. What we need is for the government to offer interest-free loans until the tourists return in large numbers. If we can attract guests, then we will be able to pay off loans and interest as we would normally.”
Wisut Kasayapanand, Manager of the Kamala Beach Resort, which sustained about 80 million baht in damage from the tsunami, called for the government to support small traders running businesses aimed at tourists.
He said, “The government should help by lowering taxes and interest rates for shops near hotels. We are trying to reopen as quickly as possible to encourage nearby shop owners to start trading again. If we opened alone and ignored the surrounding area, we would not survive.”
Wolfgang Meusburger, General Manager of the Holiday Inn Resort in Patong, which sustained more than 100 million baht in damage and is now closed for repairs, also called for the government to take a broader view in its support of tsunami-affected people and businesses.
“The government should ensure that the infrastructure in Phuket is [fully] restored as soon as possible, and should focus on reconstruction of Patong as a beach destination.
“They should make sure that the Patong beachfront is built up properly, and learn from the past.”
Mr Meusburger said that financial assistance for people who have lost jobs should also be a priority. “The government should help people who have lost their jobs to ensure that those people can have income,” he stressed.
