Ailing Thai tourism firms boosted by government

In a separate move, the cabinet also approved the Small Business Credit Guarantee Corporation (SBCG) as guarantor to stand behind any loans taken out by small and medium-sized enterprise (SME) operators from commercial banks in Thailand.

Mr. Korn Chatikavanit, a Finance Minister, said, "Thailand’s commercial banks will issue cheques to cover the payment of corporate taxes owed by SME operators to forward directly to the Revenue Department.

“In addition, the SBCG will fully guarantee the loans recommended by commercial banks without charging fees to enable Thailand’s cash strapped SME operators to pay the corporate tax."

In addition, the Thai Cabinet approved the Small and Medium Enterprises Development Bank of Thailand (SME Bank) to offer loans worth 5 billion baht to smaller tourism operators.

Finance Deputy Minister Pradit Phataraprasit said it was planned to boost the cash flow of tourism operators so the money would be loaned to operators whose businesses are not worth more than Bt200 million, with each operator being entitled to a maximum of Bt5 million.

The maximum lending period would be five years with the first year as a grace period. The interest rate for the second year will be MLR-3 (Minimum Lending Rate), while the SME Bank will evaluate rates from the third year onward. Borrowers can also act as guarantors for one another.

Submission need to have been made by late July or the start of August, when the SBCG can act as guarantor if borrowers do not have property as collateral. This will be charged at 0.25 per cent interest and must be acted upon by the SBCG within 15 days of submission.

Mr. Pradit said the cabinet also supported a proposal by Tourism and Sports Minister Chumpol Silpaarcha for the government to cover insurance risks for foreign tourists visiting Thailand at US$10,000 each. This would be done by providing 200 million baht and selecting the appropriate life assurance companies in Thailand.

This plan was launched in order to ensure tourists visit Thailand as the overall tourism revenue in Thailand has dramatically decreased due to the current political and economic crisis.