KBank continues to work with Thailand Credit Guarantee Corporation (TCG), focusing on the import-export sector with loans of up to THB60 million, and the tourism sector with loans up to 3.3x their collateral value. TCG will provide additional guarantees of up to THB40 million per loan, plus a 1.75 percent fee waiver over the first four years, and they are targeting THB1.5-billion in SME loans to those sectors by the end of 2017.
Mr. Surat Leelataviwat, KBank Executive Vice President, has revealed that KBank is working with TCG to support SMEs via the “Portfolio Guarantee Scheme Phase VI” program adding to their working capital or funding to expand their business. Import-export SMEs can get loans of up to THB60 million without collateral. TCG will provide loan guarantees of up to THB40 million and help them raise their creditworthiness to help prevent susceptibility to foreign exchange rate risks amid any Thai Baht volatility. This assistance program will also facilitate SMEs with access to funding sources for the purpose of business expansion.
In the tourism sector, SMEs – hotels, restaurants, souvenir shops, tour guides spas, etc. – can get loans to expand their business or improve their financial liquidity at up to 3.3x their collateral value. TCG will provide additional loan guarantees of up to THB40 million. New channels for payment include WeChat and Alipay card swiping terminals with special fee rates, as well as the K PLUS Shop app payment service. SME customers in the two sectors will also be granted a 1.75 percent fee waiver during the first four years. KBank intends to approve import-export and tourism SME loans of perhaps THB1.5 billion by the end of 2017.
Mr. Nitid Manoonporn, TCG President, added that broad-based business sentiment for SMEs has improved since the government introduced policies to support SMEs over recent years, especially by financial facilities through TCG. At the same time, financial institutions have gained a pivotal role in supporting SMEs via government initiatives, e.g., the Portfolio Guarantee Scheme Phase VI and other programs. Over the last eight months (January-August 2017), such credit guarantees totaled THB43.434 billion, plus 69,743 letters of guarantee and 57,966 new customers. TCG thus expects to achieve their credit guarantee target for 2017.
The top-five sectors using TCG credit guarantees include the service sector – covering tourism and hotel businesses, commanding a 25.7 percent share; the value of their credit guarantees rises every year. Manufacturing and trade account for 14.36 percent; food and beverages, 8.66 percent; iron and metal industries, 8.24 percent; and finally, the agricultural sector taking 8.13 percent. KBank closely collaborates with TCG to extend financial assistance to these entrepreneurs. As for the Portfolio Guarantee Scheme Phase VI program, KBank has increased their SME loan approvals bearing TCG credit guarantees to a market share of 31 percent, becoming the most active lender in the program.
Mr. Nitid says that TCG is confident that this cooperation will help drive the economy forward, fueled by their credit guarantee mechanism and bank loans in the Portfolio Guarantee program Phase VI. TCG and KBank will continue to promote loans and credit guarantees by allocating at least THB12 billion in credit for the program to support as many as 27,000 SME entrepreneurs, leading to approximately THB136 billion in total loans of the financial institution system, creating 108,000 jobs and over THB371 billion of increased funding entering the economic system.