The Thai economy is showing signs of slowing down, coupled with the ongoing volatility in energy prices, leading to increased production costs and higher prices for goods. As a result, small and medium-sized enterprises (SMEs) are experiencing reduced profits and liquidity issues. According to the Bank of Thailand's report on commercial banks for the first quarter of 2024, SME loans have contracted significantly by 5.1% compared to the same period last year, indicating that SMEs are still struggling to access sufficient funding from financial institutions for their operations.

Mr. Pornchai Teeravech, Director of the Fiscal Policy Office and spokesperson for the Ministry of Finance, stated that the Ministry recognizes the need to enhance liquidity for general SMEs and targeted SMEs in the manufacturing, agriculture, and service sectors. This initiative aims to concretely drive the government's IGNITE THAILAND vision. Therefore, two financial measures have been proposed: 1) IGNITE THAILAND Loan Program and 2) Portfolio Guarantee Scheme Phase 11 (PGS Phase 11), which the Cabinet approved on June 11, 2024.

1) The IGNITE THAILAND Loan Program aims to support funding for SMEs in three industrial sectors aligned with the IGNITE THAILAND vision: 1) Tourism Center, 2) Medical and Health Center, and 3) Food Center. The Government Savings Bank will provide a total loan amount of 5 billion baht, with a maximum loan amount of 10 million baht per borrower, an initial interest rate of 2.5% per annum for the first two years, and a maximum loan term of 10 years with a principal repayment grace period of up to 6 months. The Small Industry Credit Guarantee Corporation (SICGC) will guarantee loans for SMEs participating in the program, with a fee of 1.75% per annum, waived for the first two years, and 0.75% per annum for the third and fourth years. Applications for loans can be submitted until December 30, 2025.

2) The PGS Phase 11 aims to assist SMEs in accessing funding through the SICGC's guarantee mechanism, providing confidence to financial institutions in lending to SMEs. This program focuses on supporting new SMEs, vulnerable SMEs, and those in government-supported industries, such as sectors aligned with the IGNITE THAILAND vision and businesses related to social and environmental support. The SICGC will guarantee loans for SMEs with a total guarantee amount of 50 billion baht, a maximum guarantee amount of 40 million baht per borrower, and a guarantee period of up to 10 years. The average guarantee fee for the entire project will not exceed 1.75% per annum, with the SICGC covering an average compensation rate of no more than 30% throughout the project. Guarantee applications will be accepted until December 30, 2025.

The Ministry of Finance places great importance on continuously supporting and promoting SMEs. Both of these programs will help SMEs access sufficient funding from financial institutions to enhance their business capabilities in line with the government's vision and adapt to the current economic situation, thereby driving the country's economic growth in the long term.

For more information:

o Government Savings Bank, call 02 299 8000 or hotline 1115

o Small Industry Credit Guarantee Corporation, call 02 890 9999