In a move to bolster loan accessibility for small businesses, Thailand’s cabinet has granted approval on Tuesday for the creation of a national credit guarantee agency (NaCGA), as highlighted by Deputy Finance Minister Paopoom Rojanasakul.
The agency’s primary objective will be to offer financial risk assurances for smaller enterprises seeking funding from banks, according to a statement by Paopoom Rojanasakul. The central bank has emphasized the urgent need for Thailand to enhance credit opportunities for small and medium-sized businesses (SMEs), which play a crucial role in the economy that is currently underperforming compared to neighboring countries.
Reports from the central bank reveal that less than half of Thailand’s 3.2 million SMEs have the option to secure loans from financial institutions. The finance ministry and central bank are set to collaborate on drafting legislation for the establishment of the agency, with the process expected to conclude within six months, as detailed by Paopoom Rojanasakul.
Earlier in June, the cabinet gave the green light for credit guarantees totaling 50 billion baht ($1.42 billion) to facilitate SMEs in accessing loans.
