The state-owned Thai Credit Guarantee Corporation (TCG) has requested the Finance Ministry endorse its plan to launch Port Guarantee Scheme 10 (PGS10), with the aim of helping small and medium-sized enterprises (SMEs) access its loan guarantee on a lower cost basis, said TCG president Sittikorn Direksoonthorn.
The current PGS9, which will expire in November, was aimed at providing guarantees worth 150 billion baht.
Under this current scheme, the government subsidises the loan guarantee fee for SME borrowers for three years, with a loan guarantee period of up to 10 years.
The government has supported the TCG's launch of the PGS initiative in the past to help SMEs get easier access to loans.
The schemes see the TCG providing a guarantee to borrowers, while the government subsidises the loan guarantee fee for SMEs during the first few years.
Currently the TCG charges a loan guarantee fee of 1.75% of the guaranteed amount.
Mr Sittikorn said he proposed to the ministry that the PGS10 offers the same conditions as PGS9.
PGS10 aims to offer loan guarantees worth 150 billion baht and provide the guarantee to a total of 35,000 SMEs.
The scheme is expected to encourage financial institutions to provide 180 billion baht worth of loans to SMEs.
According to its own first six month performance of this year, the TCG extended loan guarantees worth 92.8 billion baht, of which 28% was granted to businesses in the service sector, 12% to the agricultural sector and 11% to the manufacturing and trade sector.
This guarantee extension helped 68,700 SMEs access loans worth 102 billion baht and retained 620,000 jobs.
It also generated economic benefit of 383 billion baht.
Mr Sittikorn added that the TCG guarantee amount provided to businesses in the agricultural sector increased from 10% last year to 12% this year, worth 11 billion baht. Of the total guarantee, 25% was granted to agricultural businesses in the South.
