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Published on February 9, 2008

A total of Bt10 billion would be used to improve the economy in each community through, for example, loans for food safety, One Tambon One Product projects and contract farming.

Another Bt10 billion would be spent to improve production in the SME sector; for example, loans to fund machinery, innovation and improved logistics.

Another Bt7.5 billion would go for supporting new enterprises to start potential business, while Bt2.5 billion would be loans to reduce energy consumption and promote renewable energy among local SMEs.

About 18,000 people would be targeted for employment under this project.

Interest is expected to be 3-per-cent lower than normal rates.

"The loans are only for enterprises that want to invest in their production or service operations.

They are not available as personal loans," said permanent secretary Chakramon Phasukavanich.

It also sought permission for SMEs to use persons or juristic persons as a guarantee when borrowing loans of not more than Bt1 million from the fund.

Under the proposed plan, the government would approve a budget of Bt10 billion to allow the SME Bank to increase its financial liquidity.

"If the government gave us less than Bt10 billion, we'd have to borrow from other banks to achieve our target. However, that would increase our financial burden," he said.

He said the SME Bank would this year try to cut its non-performing loans from more than 40 per cent to 20 per cent by selling some.

The manufacturing gross domestic product is expected to grow 7 per cent, up from 5.5-per-cent growth last year, he said.

Chalida Ekvitthayavechnukul

The Nation