Thailand: Applications open for SME soft loans

• Apr 25, 2020

The Bank of Thailand on Monday plans to kick off applications for the 500-billion-baht soft loan scheme for small and medium-sized enterprises (SMEs) affected by the coronavirus, with banks expected to start taking out the loans from the central bank late next week.

Ronadol Numnonda, the central bank’s deputy governor for financial institution stability, said banks can submit a list of SME customers approved for loans and the loan values to the Bank of Thailand starting from Monday. The central bank is expected to verify the information and notify them of results in 10 days.

“The central bank urges banks to speed up helping customers affected by the pandemic,” Mr Ronadol said.

The soft loans are expected to help ease SMEs’ suffering and boost their liquidity, enabling them to pay for necessary expenses, particularly wages, he said.

The central bank hopes financial institutions will work closely with clients over the next six months to restructure their debt and reschedule payments as income evaporates, reshaping SMEs’ financial structure.

The 500-billion-baht soft loan scheme is part of the third phase of relief measures. Under the two-year loan scheme, the central bank will charge commercial banks 0.01% interest to re-extend lending to SMEs with a maximum credit line of 500 million baht at 2%.

The government will absorb interest costs for six months for SMEs who receive the soft loans.

SMEs eligible for the measure must also operate domestically, be non-listed companies and still have been servicing debt or making late payments within 90 days of the end of 2019.

Aside from the soft loans, all SMEs with a credit line of up to 100 million baht will be automatically offered a six-month grace period on principal and interest to alleviate the impact on small and mid-scale SMEs, which are an important source of employment.

Kasikornbank (KBank) executive vice-president Surat Leelataviwat said the bank is assessing soft loan demand from SME customers and plans to turn in primary information to the central bank on Monday. KBank expects more complete data on May 4.

The central bank allows banks to update information related to the soft loans every Monday.

KBank, the country’s largest lender by assets and the biggest SME lender, has about 140,000 SME customers automatically participating in loan deferment under the relief measures.

The bank has restructured debt for 11,000 SME customers with loans outstanding of 147 billion baht. KBank has also approved soft loans provided by Government Savings Bank (GSB) to 3,600 SMEs with a total credit line of 14.8 billion baht.

Siam Commercial Bank (SCB) president Apiphan Charoenanusorn said the bank is ready to seek the central bank’s soft loans on Monday to support SME cash flow amid the pandemic crisis.

SCB’s SME customers managed to secure 20 billion baht in soft loans under GSB’s 150-billion-baht soft loan scheme in the past two weeks, she said.

Source: https://www.bangkokpost.com/business/1907045/applications-open-for-sme-soft-loans