SOM RUED BANCHONGDUANG SME loan extension is expected to rise in the final three months as estate-owned ration's 60 billion baht guarantee scheme builds up bank confidence. The higher cap guarantee coverage for bad loans under the TCG s new portfo o guarantee scheme (PGS) would help restore lending to business operators said ers Assoeiatign. The new scheme, running from Sept to the end of next year provides credit guarantee coverage at 70% of non per forming loans NP for up to of the GS, with lenders taking responsibility beyond that. The ECG is also waiving its credit guarantee fee for the first year while Jenders joining the new PGS can charge borrowers amaximum of 20 ontop ofthe NPEs of up to 18% for SME loans under mal and medium (SMEs are adversely affected by thestut eringecotomy as banks are reluctant to Deputy prime minister Somkid ce measures with ecorormi ministers ng baiat economic
stimulus packages to help low-income earners, particularly in rural areas In a related development, the Joint Standing Committee on Commerce Industry and Banking proposed yester day that the government maintain the tax cuts for SMEs implemented by previ- ous economic ministers in order to draw more SMEs to the formal tax system and standardise their accounting, allowing them easier access to financial sources. The committee also agreed to encour age cross-border trade to offset the dismal export outlook Cross border tradeisesti mated to reach 2 tril ion baht in the next two years from trillion To facilitate the goal the Committee proposed establish ing SME outlets along border provinces and urged provincial commercial offices reater role in supporting cross border rade with strategies Given the promising prospects of neighbouring economies trade provides Thailand a great opportunity Thai products have gained popularity id these markets said Mr Boontuck
The committee forecast ioreign touris arrivals to Thailand dipped by 25% last month following the Bangkok bombing on Aug 17, but the situation is expected to return to normal within two months Tourism and govemment spending are expected to be the key contributors to economic growth, with 31% year-on-year growth in foreign arrivals through July The Asian Development Bank's SME Finance Monitor 2014 reported SMEs played a critical role in driving the Thai economy, accounting for 97.2% of total enterprises at 2.76 million, up 1.2% last year. Among business sectors, A3.5% of SMEs operated in wholesale and retail trade, which includes automotive repair, followed by the service sector with 39.1% There were 11.4 million people working in SMEs in 2013, accounting for 81% of the total workforce SMEs accounted for 37 4% of GDP in SME loans outstanding for both Thai commercial banks and specialised finan cial institutions amounted to 5.51 trillion baht in 2014, with banks making up 4.44 trillion SMEloans accounted for 345% of total commercial bankloans in 2014, with their share to GDP at 366% The most active SME sectors seek ing mmercial bank loans were trade at 29 total loans, service at 25.9%, and manufacturing at 22.3% last year. Since 2010, the share of manutac turing in SME loans has been gradually decreasing, while demand from the ser vice sector is expanding Funding demand from SMEs comes mainly from their need to acquire work ing capital,