# Thai cabinet approves US$2.8-billion soft loan plan to support SME

- Link: https://www.thailand-business-news.com/banking/151649-thai-cabinet-approves-us2-8-billion-soft-loan-plan-to-help-sme
- Published: 2024-07-18T09:19:00+07:00
- Author: J. Allan

Thailand’s cabinet has approved a 100-billion-baht (US$2.8 billion) soft loan scheme
aimed at helping The Thai cabinet has approved a $2.8 billion soft loan plan to 
support small and medium-sized enterprises (SMEs). The funds will be lent to commercial
banks, which will then offer loans to borrowers at below-market rates.

## Key Takeaways

 * The Thai cabinet has approved a US$2.8-billion soft loan plan for commercial 
   banks
 * The purpose of the program is to enable small businesses to obtain financing 
   at lower rates.
 * The state-owned Government Savings Bank (GSB) will provide liquidity to commercial
   banks by offering loans at an interest rate of 0.01%

The purpose of the program is to enable small businesses to obtain financing at 
lower rates. The Government Savings Bank (GSB) will offer commercial banks loans
at an interest rate of 0.01%, enabling them to provide loans to small and medium-
sized enterprises (SMEs) at a maximum rate of 3.5% for three years.

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The government explained that the measure comes in response to banking loan restrictions
amid a slow economic recovery and rising debt.

Prime Minister Srettha Thavisin promised that new measures would be implemented 
next week, including economic support for high electricity prices.

In April, various banks announced that they would cut lending rates by 25 basis 
points for vulnerable groups for 6 months.

Prime Minister Srettha has worked with several commercial banks to lower lending
rates and boost economic activity in Thailand. The BoT expects the Thai economy 
to grow by 2.6% this year, surpassing last year’s growth of 1.9%.

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## The Thai economy performance for the first half of 2024

During the first half of the year, the Thai economy experienced a mixed performance,
reflecting both challenges and opportunities. 

Thai economic growth was primarily driven by robust private consumption and a strong
recovery in the tourism sector, which saw significant increases in spending on services
such as accommodation and food.

The export of goods and public investment faced contractions, which posed challenges
to overall economic growth.

Looking ahead, the Thai economy is projected to recover further, with growth expected
to accelerate to 2.4% for the entire year, supported by sustained private consumption,
tourism, and goods exports.

The government will continue to work on measures to boost economic activity, including
addressing high electricity prices and supporting vulnerable groups through reduced
lending rates.