Banks have provided financing worth up to 60 billion baht to small and medium-sized enterprises (SMEs) to support their transition to sustainability, according to the Bank of Thailand.
The central bank implemented the "Financing the Transition" programme in collaboration with eight commercial banks to assist local businesses, particularly SMEs, in adopting a sustainable transition.
Under this programme, the banks aim to provide a total of 100 billion baht in financial support, of which 60% has already been allocated to SMEs, said Roong Mallikamas, deputy governor for financial institution stability at the central bank, speaking at the Economist Impact event held on Tuesday.
"Given the progress of this financing programme, the total amount of financial facilities could potentially exceed the target of 100 billion baht," she said.
The eight participating commercial banks comprise: Bangkok Bank, Krungthai Bank, Kasikornbank, Siam Commercial Bank, Bank of Ayudhya, TMBThanachart Bank, Kiatnakin Phatra Financial Group, and UOB Thailand.
Ms Roong said SMEs play a crucial role in supporting the Thai economy, accounting for 70% of the country's total employment. However, transitioning to sustainable business practices presents several challenges for SMEs, including a lack of data, expertise and funding.
She said financing alone is insufficient, as businesses must also be willing to engage in sustainability initiatives. Expertise is another key factor in helping SMEs select appropriate technologies and implement effective strategies for their transition, said Ms Roong.
As a result, a partnership model was identified as a viable solution, enabling SMEs to access a sustainable ecosystem that includes low-interest sustainable financing programmes, data, technology, government incentives and tax benefits.
In addition, the central bank is implementing the second phase of the Thailand Taxonomy, which is expected to take effect in the second half of this year, she said. Phase 2 covers four key sectors: agriculture, manufacturing, buildings and real estate, and waste management.
For the agricultural sector, differences in measuring greenhouse gas emissions across various regions and crop/livestock species led to defining internationally recognised best practices to help reduce emissions. These best practices are categorised into three levels -- basic, intermediate and advanced -- based on technological complexity and investment requirements.
Ms Roong said the central bank completed a public hearing for Thailand Taxonomy Phase 2, receiving valuable feedback such as requests to expand the list of key crops and livestock species relevant to Thailand's economy, as well as to provide more flexible implementation guidelines.
For example, instead of mandating the use of electric sugar-cane harvesters, the framework should also accommodate hybrid or biofuel-powered alternatives.
The Taxonomy Working Group is reviewing these suggestions and will refine the framework before finalising and publishing it by the end of May this year, she said.
