The central bank has talked with banks about tweaking the scrutiny process to give SMEs easier access to the funding source after some barriers arose, said Ronadol Numnonda, the central bank’s deputy governor for financial institution stability, reports the Bangkok Post.
The imminent rejig will prioritise the soft loan approval process but will keep the same borrower categories and loan conditions because the royal decree does not allow any changes in conditions.
Mr Ronadol said the loan adjustment is expected to be completed by this month and will be ready in the next few weeks.
The Bank of Thailand requires banks to report demand for the soft loan scheme every Monday, he said, and the central bank is monitoring loan demand and withdrawals.
“The BoT has talked to banks about soft loan demand and its barriers in order to improve the loan extension process,” Mr Ronadol said. “This will help support the liquidity of SME business operators battered by the outbreak and help overcome the crisis.”
According to central bank data, 51,991 SMEs have applied for the central bank’s soft loans with a credit line request of B80.7bn after the scheme’s applications were made available on April 1.
The central bank is offering the B500bn in soft loans at 0.01% interest to financial institutions for two years to re-lend to SMEs with a maximum credit line of B500 million at 2% interest. The government will absorb interest charges for six months for SMEs that receive soft loans.
To be eligible, SMEs must operate domestically, be non-listed companies, have a credit line of up to B500mn from financial institutions, and continue to service debt or make late payments of less than 90 days at the end of last year.
The maximum drawdown for the soft loans is set at 20% of each bank’s loans outstanding at the end of December. The government will partly compensate financial institutions for losses that are incurred.