Since the pandemic, the number of credit guarantee clients has surged to 800,000, primarily due to initiatives aimed at assisting small and medium-sized enterprises (SMEs) in gaining better access to credit, as stated by Sittikorn Direksoonthorn, president of the Thai Credit Guarantee Corporation (TCG).
Mr. Sittikorn revealed that during 2020-21, TCG had only 400,000 credit guarantee clients. He attributed the doubling of this figure to the increased demand for loans from SMEs looking to improve their liquidity, alongside continued concerns from financial institutions regarding loan quality, which prompted TCG’s involvement in providing guarantees.
He noted that the newly approved portfolio guarantee scheme (PGS 11), which includes a guaranteed budget of 50 billion baht for SMEs, is anticipated to utilize around 30 billion baht of this budget in the current year.
PGS 11 is a government-backed credit guarantee initiative for SMEs aimed at stimulating the economy and positioning Thailand as a global industrial hub, in line with the government’s Ignite Thailand vision, which encompasses eight key areas: tourism, healthcare, food production, aviation, regional transport, future automotive manufacturing, digital economy, and finance.
Additionally, it supports SMEs engaged in social and environmental business ventures, offering guarantees of up to 40 million baht per client.
Under the PGS Phase 11 project, funds are allocated to assist targeted SME groups aligned with the government’s Ignite vision and green policies as follows:
- TCG SMEs Ignite Biz: A total guarantee budget of 10 billion baht is allocated for corporate SMEs operating in ISIC Code groups defined by TCG, in accordance with the Ignite Thailand vision, covering the eight specified areas. Each guarantee application must be a minimum of 200,000 baht, with a maximum of 10 million baht available per client.
- TCG SMEs Ignite One: This program has a guarantee budget of 7 billion baht for individual SMEs operating within ISIC Code groups defined by TCG under the Ignite Thailand vision. Each application must also be a minimum of 200,000 baht, with a cap of 5 million baht per client.
- TCG SMEs Smart Green: With a guarantee budget of 1 billion baht, this scheme is designed for both corporate and individual SMEs receiving loans through environmental support programs from financial institutions. Each guarantee application must be a minimum of 1 million baht, allowing a maximum of 40 million baht per client.
From January to June, TCG supported 45,440 SMEs in accessing credit, with 94% classified as micro-enterprises, receiving an average loan guarantee of 80,000 baht per client. The remaining 6% consisted of SMEs with an average loan guarantee of 5.31 million baht each.
The total approved loan guarantees amounted to approximately 19 billion baht, preserving 168,762 jobs, generating 19.6 billion baht in loans within the system, and creating an estimated 76.7 billion baht in economic benefits.
The top three sectors benefiting from the highest credit guarantees were: services (27.5%), manufacturing and trade (13.5%), and food and beverages (9.6%), collectively accounting for 51% of the guarantees, valued at about 9.6 billion baht.
The following sectors also received significant credit guarantees: consumer goods (9.5%), automotive industry (8.5%), and agriculture (8.2%).
Geographically, 40% of the credit guarantees were distributed in Bangkok and its metropolitan area, while the remaining 60% was allocated to other regions: 18% in the Northeast, 13% in the South, 12% in the North, 9% in the East, 5% in the Central region, and 3% in the West.
Furthermore, over 15,000 SMEs engaged in debt restructuring and received debt settlements between April 2022 and June 2024, totaling more than 7 billion baht in debt assistance.
In the second half of the year, TCG plans to further stimulate the economy and assist SMEs in accessing credit, focusing on vulnerable groups, environmentally-conscious businesses, new entrepreneurs and startups, and sectors outlined in the government’s Ignite Thailand policy, according to Mr. Sittikorn.
