Bangkok (VNA) – Thailand’s Finance Mini🐽stry is preparing a credit guarante⛎e fund worth 50 billion THB (1.35 billion USD) to help small and medium-sized enterprises (SMEs) access credit, local media reported.

According to Deputy Finance Minister Paopoom Rojanasakul, the new portfolio guarantee scheme (PGS 11), operated by the state-owned Thai Credit Guarantee Corporation (TCG), aims to provide lending guarantees for banks to quickly inject liquidity into the financial system. This mechanism will reduce risk and increase collateral for SMEs in banks' assessments, helping those with insufficient collateral to access credit immediately, Paopoom was quoted by the Bangkok Post as saying. The PGS 11 credit guarantee scheme has a project budget of 50 billion THB and offers a maximum of 40 million THB per borrower. The guarantee period is up to 10 years, and each guarantee cannot exceed 30% of the credit amount, he said, noting that priority is given to guaranteeing "new SMEs" first to broaden access to credit. According to Paopoom, commercial bank loans for large businesses (more than 500 million THB) grew by 3.3% last year, but loans under 500 million THB declined by 5.1%. Banks' capital adequacy ratio is 20.1%, the liquidity coverage ratio is 203% and the NPL coverage ratio is 176%, he said. These figures reflect that banks are very stable, in part because they choose to lend only to large businesses, while SMEs are restricted from accessing credit as banks opt to avoid the risk. This leaves SMEs without necessary funds, leading to closures, production slowdowns and job cuts, affecting the economy, he said. The TCG's current guarantee portfolio amounts to 100 billion THB, with 12-13% covering the service sector, including tourism and wellness./.