State-bank loan applications on fast track

       LOANS APPROVED BY SIX STATE BANKS JAN-JULY 99.5% of targets 622 billion baht
       State banks will be able to approve new loans as quickly as three days under the government's new "Fast Track" system,according to Finance Minister Korn Chatikavanij.
       No loan application with any specialised state-owned financial institution should take longer than 21 days to approve, he added.
       The Finance Ministry has told state banks to speed up lending to support the recovery, particularly for the tourism,export and small business sectors.
       Commercial bank lending in the first half contracted from the same period last year, due in part to falling demand for working capital and project loans under the recession. As well, banks were taking a more risk-averse approach to new lending.
       The Finance Ministry recently increased its loan target for the state banks to a total of 927 billion baht for the full year, up from 625 billion.
       "Accelerating state bank lending will help add 0.5 to 0.9 percentage points to GDP growth, depending on the disbursal rate of new loans," Mr Korn said.
       The National Economic and Social Development Board on Monday cut its economic forecast for 2009 to a contraction of between 3% and 3.5% from last year, down from earlier estimates of a decline of 2.5% to 3.5%.
       The six state banks participating in the Fast Track programme are the Government Savings Bank, the Bank for Agriculture and Agricultural Co-operatives,the Government Housing Bank, the SME Bank, the Islamic Bank and the Small Industry Credit Guarantee Corp.
       All six banks will revamp their loan application procedures to approve new credit requests within 3,5,7,15 or 21 days after documentation is complete,depending on the complexity, size and type of loan and borrower.
       A loan to a shophouse business may take just seven working days for approval,while revolving credit lines of up to 10 million baht may be approved within five days.
       The ministry also announced special programmes run by each of the six banks to help accelerate credit lending and support economic recovery.
       The SICG will take a more aggressive role in offering credit guarantees for borrowers without collateral, and will waive guarantee fees of 1.75% for the first year and double credit lines to 40 million baht from 20 million earlier.
       The ministry also said the GSB and SME Bank would take the lead in lending to tourism operators affected by the global economic crisis and domestic political turmoil.
       The GSB also will aim to increase lending through its People's Bank microfinance programme to another 500,000 borrowers by the end of the year, with each borrower eligible for up to 100,000 baht. The People's Bank also aims to lend up to 500,000 baht each to another 500,000 shophouses and small retailers nationwide.
       The Exim Bank, meanwhile, will ease terms and permit purchase orders or letters of credit to serve as documentation against credit requests.
       For the BAAC, officials said lending to small farmers would be accelerated while the bank also prepares to introduce a new price support programme for key crops to replace the crop mortgage programme now used by the government.
       The GHB, meanwhile, announced that it would offer special interest rates for 15 billion baht in new home mortgage loans.
       From January to July, the six state banks approved loans of 622 billion baht,or 99.5% of their targets. The GSB posted the strongest performance, with loans exceeding targets by 115%, followed by the BAAC at 105%. The Exim Bank was the worst performer, at 50%.
       Mr Korn said the Finance Ministry estimated that 730,000 borrowers nationwide would receive state loans, with an approval target of 80% of the 927 billion baht target and a disbursal target of 70%.