Latest news with #ThaiCreditGuaranteeCorporation
Bangkok Post
16-07-2025
- Business
- Bangkok Post
B3bn credit guarantees to aid firms hit by trade war
Thai Credit Guarantee Corporation (TCG) has launched a credit guarantee measure worth 3 billion baht to support entrepreneurs affected by the ongoing trade war. According to TCG president Sittikorn Direksoonthorn, the measure will start in the second half of this year, particularly in the third quarter covering the period July to September, under the project name "SMEs Power Trade & Biz". The project provides a total guarantee limit of 3 billion baht, offering guarantees ranging from 500,000 to 10 million baht per borrower. It targets groups affected by the trade war, related supply chains, and those impacted by economic conditions. In addition, in the second half of this year, TCG will also support credit guarantees for small-scale vendors or independent business owners, both online and offline, under the project name "SMEs Micro Biz", with a total fund of 2 billion baht. This group often needs liquidity but lacks sufficient collateral. These vendors are considered to be a vulnerable group suffering from the economic downturn. For both projects, TCG will waive the guarantee fee for the first three years. After that, a fee of 1.5% of the guaranteed loan amount will be charged, which is lower than the normal rate of 1.75%. The maximum guarantee period is up to seven years. As for the claim payout rates to participating financial institutions under the two projects, TCG will cover 37% of the guaranteed portfolio under the SMEs Power Trade & Biz project. Under the SMEs Micro Biz project, it will cover 42%. Moreover, TCG also offers debt restructuring programmes for borrowers under its credit guarantee scheme. From the start of 2022 to June 30, 2025, TCG has already helped to restructure the debts of 20,900 borrowers, covering a total debt of 13.4 billion baht. Measures include extending repayment periods, interest waivers, and principal reductions. "These restructuring measures help debtors to 'survive and sustain' and make it easier and faster for them to get out of debt. It helps keep businesses alive and gives them the encouragement to become strong again," said Mr Sittikorn. Regarding performance in the first half of this year, TCG provided a total credit guarantee of 19.4 billion baht, enabling 21,300 SMEs to access credit. For micro-SMEs the average guarantee per borrower was 140,000 baht, while for general SMEs the average was 4.25 million baht. The top three business sectors with the highest guarantee volume were services, accounting for 31.4%, food and beverage accounting for 10.7%, and agriculture accounting for 8%. These three sectors combined accounted for 50% of all guarantees, reflecting the key industries driving the national economy in the first six months of the year.
Bangkok Post
08-07-2025
- Business
- Bangkok Post
Bankers hope to mimic Vietnam deal
The US's proposed 36% tariff on Thai goods is likely to severely undermine Thailand's export competitiveness, warn economists in the banking sector. The best outcome Thailand can likely secure in trade negotiations with the US is a tariff rate of 20-25%, similar to the rate granted to Vietnam, said Kobsak Pootrakool, senior executive vice-president of Bangkok Bank. NEGATIVE IMPACT "If the final rate is higher, such as the proposed 36%, it would severely disadvantage Thai exporters and make it extremely difficult for them to compete in international markets," said Mr Kobsak. "The most pressing concern is Vietnam already secured a 20% tariff rate. If Thailand faces a significantly higher tariff, foreign companies planning investment here may shift their investments to Vietnam, inflicting long-term damage to the Thai economy." The US accounts for 18% of Thailand's exports. If the 36% rate is implemented, exports to the US could fall to 10% of the total, weakening bilateral trade relations over the long term, he said. The government should act swiftly by expanding into new export markets and offering export loan guarantees for small and medium-sized enterprises (SMEs) to cushion the impact, said Mr Kobsak. For some crops such as soybeans, which Thailand already imports in large quantities, tariffs may be eliminated. However, for other agricultural and livestock products, the government may need to negotiate special terms or allocate budgetary support to assist local producers, he said. Despite a slowing economy, the baht is at its strongest level in 2-3 years, due primarily to its inverse correlation with the US dollar, he said. To mitigate the effects of US tariffs, Mr Kobsak recommends exporters diversify into India, the Middle East, China, and Southeast Asia. He urged the government to guarantee export loans for SMEs through the Thai Credit Guarantee Corporation, while supporting SMEs through government procurement programmes. 'GIVE AND TAKE' STRATEGY Pipat Luengnaruemitcha, chief economist at Kiatnakin Phatra Financial Group, said the Thai government may need to adopt a give-and-take negotiation strategy, rather than aiming for a win-win outcome, following the US announcing it will maintain a 36% tariff on Thai exports. Citing the US-Vietnam negotiations, Mr Pipat said the US may expect Thailand to open its market further to American products, reduce import tariffs, remove non-tariff barriers, and address fraudulent origin labelling. He suggested Thailand gradually liberalise sensitive sectors, particularly agriculture. While agriculture is a pillar of the Thai economy and employs a large portion of the population, the government could implement measures to mitigate any short-term impact, said Mr Pipat. Thailand should also strengthen its competitiveness by attracting high-value and high-tech investments through incentives such as R&D support and tax credits to encourage electric vehicle parts manufacturing, artificial intelligence hardware production, and data centres, he said. Mr Pipat said an integrated task force is needed, comprising the Finance, Commerce and Agriculture ministries collaborating with the private sector to enable swift and strategic decision-making. Clear communication with all stakeholders is vital, including the US and international investors, about Thailand's serious commitment to economic development, he said. TOURISM A BUFFER If higher US tariffs are applied to Thai exports, the greatest impact would likely be felt in electronics and electrical components, where Thailand could face intensified global competition, said Sathit Talaengsatya, an economist at UOB Thailand. "Thailand maintains a competitive edge in tourism and hospitality, which should be developed into high-value service sectors such as wellness tourism to offset the impact on manufacturing exports," he said.
