Exploring "Soft Loans" from the Bank of Thailand Distributed to Various Financial Institutions, Offering Low-Interest "Loans" for Small and Medium Enterprises (SMEs) to Help Maintain Business Liquidity During the "COVID-19" Crisis

Following the Bank of Thailand's (BoT) measures to provide low-interest loans (soft loans) to various financial institutions for lending to SMEs with a credit limit of up to 500 million baht (for each financial institution), the aim is to enhance liquidity for business management amid the abnormal situation caused by the "COVID-19" pandemic.

Currently, several financial institutions have launched "low-interest loans" for SME operators and the "Non-bank" sector. We have compiled a list of financial institutions offering these loans along with the loan conditions of each bank to facilitate easier comparisons before participating in the program.

  • Small and Medium Enterprise Development Bank of Thailand (SME DBANK)

Program: Low-cost loans (soft loans) to assist debtors affected by the COVID-19 outbreak

Loan Amount: Up to 20% of the outstanding debt of the debtor as of December 31, 2019.

Eligibility for Loan Applicants: 
- Existing customers of SME DBANK with a normal or special classification status (non-NPL) as of December 31, 2019.
- Affected by the COVID-19 outbreak.
- No non-performing loans (NPL) as of the loan application date.

Interest Rate and Repayment: Interest rate of 2% per annum with a maximum loan term of 2 years, with a 6-month principal repayment holiday. During the first six months, the government will cover the interest for the debtor.

Collateral: None/with collateral.

For more information: Call center 1357

  • Government Savings Bank (GSB)

Program: Low-interest loans (Soft Loans) for Non-Bank operators affected by COVID-19

Loan Amount: Up to 5 billion baht per borrower, based on the business's capability and necessity, limited to 10% of the borrower's loan portfolio as of the end of the month prior to approval, considering only the portfolios of individual and corporate debtors in good standing.

Eligibility for Loan Applicants: 
- Non-bank financial service providers offering loans to individual debtors, including credit card loans, personal loans, leasing, motorcycle loans, and vehicle registration loans.
- Must have a net profit from operations in the fiscal year 2019.
- D/E Ratio must not exceed 10 times, and NPLs must not exceed 5.00%.
- Must be affected by the COVID-19 outbreak both directly and indirectly.
- Must have a clear and widely announced debt relief measure to assist debtors, along with additional supportive measures that exceed the minimum standards set by the BoT.

Interest Rate and Repayment: Loan interest rate of 2% per annum, with the same interest rate applicable if the borrower exits the program or defaults on repayment, in accordance with the low-interest loan program for businesses affected by COVID-19, with a loan term of 2 years.

Collateral: Must provide collateral, such as claims from the borrower's debtors (debtor portfolio) equal to the loan amount, registered according to business collateral laws, and/or individuals trusted by the bank, and/or other collateral as per the bank's criteria.

Project Duration: Until December 30, 2020, or until the total loan limit in the project is exhausted, whichever comes first.

For more information: Information service center 1115

  • Krung Thai Bank

Program: Krung Thai's COVID-19 Relief Low-Interest SME Loans (Soft Loans)

Loan Amount: Up to 20 million baht.

Eligibility for Loan Applicants: 
- Must have been in business for at least 2 years.
- Must not have applied for loans with financial institutions or have outstanding loans with financial institutions as of December 31, 2019.
- Must be a new loan application or an additional loan only (refinancing is not allowed).

Interest Rate and Repayment: Low interest of 2% for 2 years.

Collateral: 
- Business premises.
- Land with buildings.
- Vacant land.
- Fixed deposits.
In cases where there is no collateral, a time-limited loan (T/L) of up to 1 million baht can be provided, fully guaranteed by the Credit Guarantee Corporation. Other conditions and loan considerations are at the bank's discretion.

For more information: Inquiries can be made at any Krung Thai Bank branch or Krung Thai Contact Center at 02-111-1111.

SOURCE: www.bangkokbiznews.com