Dhaka: The government of Thailand is going to provide small-and medium-sized enterprises (SMEs) in the tourist and services sector with THB 100 billion new soft loans to survive through the coronavirus crisis, Finance Minister Uttama Savanayana said on July 13.
The loans will offer more relaxed conditions than the central bank's THB 500 billion soft loan scheme, Savanayana added.
"These will reduce operators' costs and give them liquidity to keep jobs. It should be released soon."
The loans, to be provided by the Government Savings Bank, will follow various relief measures for SMEs which the finance minister said employs 80 per cent of the total workforce.
Although Thailand has recorded no domestic transmissions for more than one month, the global impacts of the pandemic have hit the economy badly, especially tourism, with a border closure keeping visitors out and weaker demand for international air travel set to slow its recovery.
The economy is forecast to contract by a record 8.1 per cent this year, with foreign tourist numbers tumbling by 80 per cent, according to the central bank.
Separately, some THB 20 billion of soft loans will be offered to retail vendors affected by the outbreak, Savanayana mentioned.
On the other hand, Chairat Trirattanajarasporn, President of Tourism Council of Thailand, has warned that about one-third of tourism business operators in Thailand will run out of liquidity to keep their businesses afloat in the second half of 2020.
“The impact of COVID-19 will become most serious in the third quarter this year after many operators had tried to cut costs by letting some of their employees go, but after more than a million positions cut the situation still hasn’t improved, as no foreign tourists are allowed into the country yet,” he said.
“The council estimates that in the next three months up to 30 per cent of tourism-related businesses in Thailand are at risk of shutting down permanently.”
Chairat added that some operators are starting to sell their establishments, such as hotels, resorts, restaurants and gift shops to investors who wish to turn them into other business.
“However, since the real estate business is also affected by the economic crisis, the hope of selling their properties is still bleak for these owners,” he added.
The council had a meeting with Prime Minister Gen Prayut Chan-o-cha on July 10 and proposed five measures to help tourism business operators.
These measures are: providing soft loans to tourism entrepreneurs; considering moving the schedule up to open the country to foreign tourists under a practice similar to the travel bubble scheme; offering discount on electricity bills, one of the main costs of hotel operators; having the Social Security Office extend the compensation payment to temporarily unemployed staff from June to December, and reducing the employer’s contribution to Social Security Fund from 4 per cent to 1 per cent.
Chairat also added that the Tourism Council of Thailand has predicted the income from foreign tourists in 2020 will drop significantly from THB 2.2 trillion last year to only around THB 600 billion.