With international tourism still far on the horizon and domestic tourism barely raking in some revenues, the national government in Bangkok has decided to extend a loan to the small-and-medium enterprises as well as the informal workers in the tourism industry.
The loan package will be of low interest rate, and is worth a total of THB50 billion.
When the pandemic had hit Thailand in the first quarter of 2020, one of the sectors to be hit the hardest is tourism. With an economy that’s heavily reliant on receipts from international tourists, Thailand experienced the worst contraction since the 1998 Asian financial crisis.
To mitigate the effects of the pandemic on the tourism sector, the government launched the “We Travel Together” stimulus package to boost domestic tourism. The program allowed locals to take advantage of subsidies and get discounted airfare and hotel accommodation.
However, the second wave of outbreaks that took root in the province of Samut Sakhon in the middle of December last year has shattered the domestic tourists’ confidence in traveling. This is made worse by the imposition of stringent control measures in areas of high risk, which resulted to the closure of several businesses and the slowing down once again of domestic tourism.
In order to alleviate the financial hardship experienced by the informal workers and SMEs in the tourism sector, Finance Minister Arkhom Termpittayapaisith said that the Cabinet agreed to roll out the THB50-billion loan program.
According to the Minister, the Government Savings Back and the Bank for Agriculture and Agricultural Cooperatives have been authorized to offer loans to the affected businesses and workers in the tourism sector.
Each Bank has been allocated THB20 billion in funds that will be extended as loans to informal workers.
The loan program will charge a flat interest rate of 0.1% per month on top of the principal amount borrowed. Borrowers will have a grace period of 12 months before payments for interest and principal amounts will begin.
Finally, borrowers will have to repay the loan within the next four years, including the 12-month grace period given to them before collections start.
Qualified workers and SMEs can apply for financial assistance until June 30 this year.
In addition, the GSB has been approved funds worth THB10 billion. This loan will be offered to businesses in the tourism sector, and those not in the industry but are providing services and products.
In order to qualify for the loan, applicants must have real estate properties that can be pledged as collateral. The amount that they can borrow will be based on the government’s appraisal of the value of the properties.
Specifically, they can loan up to 70% of the appraised value of their properties, but only up to THB50 million. These loans are payable for three years, and interest rate will go up each year starting at 0.1%, then at 0.99% and 5.99%.
Interested businesses can apply for a credit line until June 30 this year.