State-owned banks have begun a campaign of aggressive lending aimed at pulling the country out of recession.
Measures involve fast-track loans on three-day approval, waiving loanguarantee fees and offering credit to foreign importers.
Finance Minister Korn Chatikavanij and executives of seven specialised financial institutions yesterday launched fast-track lending, in which borrowers could obtain loans within three days, or no more than 21 days.
The Finance Ministry wants these banks to increase their combined target lending this year from Bt625.5 billion to Bt927 billion.
Fast-track lending is major feature of the scheme. Korn said banks would not only reduce days of waiting, but also make loan documents simpler, with fewer pages.
To achieve the new lending target, Korn said the Samll Business Credit Guarantee Corporation (SBCG) would waive its 1.75-per-cent-per-year guarantee fee for the first year of the loan term. It will also double its per-bank-per-borrower loan guarantee to Bt40 million.
SBCG chairman Pichit Akrathit pledged to meet the target of providing loan guarantees worth Bt30 billion even though the scheme had not yet made much progress. So far, the corporation has provided guarantees worth only Bt3 billion.
Pichit said if the SBCG could fully implement its pledge, it would lead to bank lending worth up to Bt100 billion.
The Finance Ministry next week will ask the Cabinet to provide a financial subsidy to the SBCG to compensate it for the cost of implementing the project. For the whole project, the corporation needs Bt2.5 billion in compensation from the government.
Export-Import Bank of Thailand (Exim Bank) president Apichai Boontherawara said his bank would offer credit to foreign importers, in order to promote the country's goods and services. To mitigate its risk, Exim Bank will advance loans via foreign banks. Apichai said he believed foreign importers could repay their debts even though they faced a lack of liquidity in their countries.
The bank will also offer credit to suppliers of Thai exporters.
For fast-track Exim credit, the bank will offer a revolving credit line of up to Bt10 million and notify eligible exporters within five business days of the completion of loan documents. Teh bank will also offer working-capital loans of more than Bt10 million and notify exporters of whether their application has passed preliminary screening within seven days.
Government Savings Bank (GSB) president and CEO Lersuk Chuladesa has promised to reduce loan documents from eight pages to two, group guarantees will require only two people rather than three, and loan approvals will be notified within three days.
This applies to microcredit loans for low-income applicants from the People's Bank and credit to small entrepreneurs who run businesses from their townhouses.
Ennoo Suesuwan, acting president of the Bank for Agriculture and Agricutltural Cooperatives (BAAC), said the bank's fast-track lending would be offered to 680,000 farmers and ordinary borrowers, with a total loan target of Bt22 billion. The bank's existing customers will get loans within five days, while new clients will be notified with 15 days.
Government Housing Bank (GHB) president Khan Prachuabmoh said h is bank would offer mortgages totalling Bt15 billion to people buying homes from land developers or building their own homes. The interest rate would be 1.5 per cent for the first three months, 2.99 per cent for the rest of the first year and the bank's minimum retail rate minus 2 per cent for the second and third years.
The finance minister said the GSB and the Small and Medium Enterprise Development Bank of Thailand (SME Bank) would take care of the tourism industry. He said new loans would contribute 0.5-0.9 per cent to expansio of gross domestic product and that he expected 730,000 people to access them.
The specialised financial institutions have lent 99.54 per cent of their earlier combined target of Bt625.5 billion. The BAAC has lent 105 per cent, the GSB 116 per cent, the GHB 73.55 per cent, the SME Bank 64.76 per cent, Exim 50.26 per cent and the Ialamic Bank 75.78 per cent.
Lending by the specialised financial institutions rose 6.5 per cent in the first half of the year, while commercial bank's lending contracted 0.4 per cent in the first five months.
Wednesday, August 26, 2009
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