State-owned Thai Credit Guarantee Corporation (TCG) is preparing to launch a 20-billion-baht bad debt guarantee program to assist struggling small and medium-sized enterprises (SMEs) saddled with bad debts.
TCG’s president and chief executive Rak Vorrakitpokatorn said the program will commence in April for SMEs whose loans have turned into special mention loans, defined as loans overdue by no more than 90 days or three months.
He said the program will also cover SME loans that have turned into non-performing loans (NPLs), defined as loans overdue by more than 90 days, although these NPLs must not exceed two years of overdue payment.
TCG will provide a maximum claim of 40% for financial institutions that are creditors of SME loans. Of the 20-billion-baht bad debt guarantee, 10 billion will be allocated for SME loans classified in the special mention loan segment, while another 10 billion will be allotted for SME NPLs. (NNT)
