Thailand: THB350bn aid gets go-ahead

• The cabinet on 23 Mar 21 approved financial relief measures worth THB350bn to help the business sector recover from the impact of Covid-19 after the existing THB500bn aid programme underperformed.
• The measures include THB250bn of soft loans provided by the central bank and another THB100bn for asset warehousing to assist debtors who are still unable to repay loans.
• Under the THB250bn loan scheme, business operators with a credit line of no more than THB500bn with financial institutions can seek loans of no more than 30% of the credit line as of 31 Dec 19 or 28 Feb 21, depending on which is higher, but no more than THB150mn.
• For entrepreneurs which have no credit line with any financial institution as of 28 Feb 21, they can seek loans of no more than THB20mn at an annual interest rate of no more than 2% during the first two-year period of the contract and an average rate of no more than 5% per year.
• This measure aims to address limitations of the existing THB500bn soft loan measure by expanding the pool of eligible borrowers to include both new and existing borrowers, raising credit limits, lengthening loan tenors, and amending interest rates to better support a business recovery, the Bank of Thailand (BoT) said.
• Effective from Apr 20, the soft loan decree has underperformed, with the disbursement rate falling below expectations.
• Some THB132.8bn worth of soft loans or only 26.6% of the money under the scheme had been disbursed to SMEs as of 15 Mar 21, according to central bank data. As for the THB100bn for asset warehousing, the measure includes the transfer of collateral assets for debt settlement and giving debtors the right to rent their assets or buy back their assets later.
• The programme will prevent businesses such as hotel operators from having to liquidate distressed assets at firesale prices or from going out of business because of their debts.
• BoT governor Sethaput Suthiwartnarueput told a briefing that the economy is expected to return to pre-Covid levels in 3Q22, with the recovery slow and uneven as tourism remains sluggish.
• The tourism-reliant economy could take at least four to five years to see the number of foreign tourists return to normal levels, he said.

External Link : https://www.bangkokpost.com/thailand/general/2088515/b350bn-aid-gets-go-ahead