Thailand plans to set up a mega- billion fund for small and medium enterprises(SMEs) in the near future, Finance Minister Sommai Pasee said on Monday.
The military-led government is currently formulating plans to set up the Venture Capital Fund which will begin to lend money to varied Thai SME businesses early next year, according to the finance minister.
The Venture Capital Fund will have an initial sum of about 1.6 billion U.S. dollars in loans for the cash-strapped SMEs with the government contributing 10 percent of that total, Sommai said.
The balance of the Fund will be provided by Thai and international private sectors so that it will be readily sufficient for the fledging SMEs throughout the country.
The Fund, which will be registered in the Securities Exchange of Thailand, is primarily designed to give SME entrepreneurs easy access to funding in addition to the existing SME Bank, which, he said, has not adequately covered the SME sector so far.
The government-endorsed fund will lend money to those which may not fare very profitably or make as little as 8 percent in gross profit in a year, according to Sommai.
The SMEs with such low investment returns would have slim chances of being loaned by the SME Bank, which could not effectually help out the cash-strapped, low profitable SME businesses, particularly those in remote areas of the country, according to the finance minister.
"SME entrepreneurs, including those shunned by the SME Bank, will have easy access to the Venture Capital Fund since they could probably play a pivotal part in the country's economic growth in the future," said the finance minister.
High-caliber executive officials will be employed to run the Fund for optimum interests of the Thai SMEs, which will certainly be promoted alongside relatively large-scale businesses, he added.
Without elaborating, Sommai commented that the government under Premier Gen Prayuth Chan-ocha is currently running the national economy at "half capacity" and that it is yet to run at "full capacity."
He assured that the government will push for varied, new investment projects to which the private sector will be encouraged to contribute.