Thai Credit Guarantee Corporation (TCG) reported for the first 11 months of this year, the loan guarantee service for micro, small and medium-sized enterprises (MSMEs) was worth 108 billion baht, exceeding the target set for the entire year by 14%, says general manager Sittikorn Direksoonthorn.
TCG, a state-owned specialised financial institution, was established to provide support to MSMEs through a loan guarantee service, helping them access loans from financial institutions.
The institution set a loan guarantee target of 95 billion baht for this year.
Mr Sittikorn said the approved credit guarantees this year enabled 98,000 MSMEs (with micro enterprises accounted for 80%) to access loans worth 119 billion baht and retain 822,000 jobs.
He said 2024 will be a more challenging year as TCG implements policies to align with government policies, such as tackling informal debt.
The agency plans to help small businesses gain wider access to formal financial sources next year, said Mr Sittikorn.
TCG will also provide financial advisory service on debt restructuring and new business development, he said.
Regarding recent restructuring, TCG used digital technology to connect systems with its partner financial institutions so that loan guarantee products could reach more target groups and loan guarantee approvals could be expedited, said Mr Sittikorn.
The Bank of Thailand surveyed 2,400 SMEs nationwide to study their problems, obstacles and adaptations in order to provide better assistance.
The study found SMEs are saddled with high business costs such as raw material prices, financial costs and wages, while also facing latent costs in dealing with the government and fierce competition when applying for loans.
The survey detailed that when faced with competition, 79% of the SMEs used a cost differentiation strategy to attract customers, which eventually resulted in decreasing sales if product quality was not improved.
