An official from the Bank of Thailand stressed the critical need for Thailand to address the challenges in providing credit access to small- and medium-sized enterprises (SMEs), as these enterprises play a crucial role in the country’s economy.
Deputy central bank governor, Ronadol Numnonda, highlighted that the issues hindering credit access for SMEs are inherent in the system and both the central bank and finance ministry are collaborating to rectify them.
During a seminar, Numnonda emphasized the significance of SMEs, as they make up over a third of the economy and are responsible for around 70% of total employment. Assistant Governor Somchai Lertlarpwasin noted that loans to smaller businesses have been decreasing for some time, with a 5.1% decline in the first quarter of 2024 compared to the previous year. He also mentioned that less than half of the 3.2 million SMEs in Thailand have the opportunity to secure loans from financial institutions.
In a bid to address this issue, Deputy Finance Minister Paopoom Rojanasakul had previously announced the government’s intention to offer 50 billion baht ($1.37 billion) in credit guarantees for SMEs to facilitate their access to loans. The newly appointed Finance Minister Pichai Chunhavajira underscored the importance of ensuring people’s access to credit rather than solely focusing on interest rates.
While the Bank of Thailand maintained its key interest rate at 2.50%, the central bank reiterated that rate cuts and fiscal measures would not significantly boost the economy. Instead, the central bank favored implementing structural reforms to enhance productivity levels. The next interest rate review is scheduled for June 12.
