NIA Joins Hands With Banks To Back Struggling Startups

NIA together with state banks will provide loans with zero interest for tech startups and allocates 50 million baht to support innovative entrepreneurs that are focusing on coping with the Covid-19 outbreak.

According to National Innovation Agency (NIA) executive director Pun-Arj Chairatana, it’s in discussion with state-owned banks to provide loans with zero for tech startups who are hampered by the outbreak including travel, event organizers and services.

NIA will allocate budget to support the interest payments over the course of 36 months for startups through couple state banks who are NIA’s partners.

He admitted an obstacle as some startups held by several venture capitals or investors with no interest in financial loan, they cannot be assisted by this scheme. “Some local startups may disappear as they face capital constraints.”

In addition, the NIA allocated 50 million baht to support innovative projects that are focusing on coping with the outbreak, such as Safety Thailand, the application proactively controls Covid-19 outbreak through AI data processing of patients, a risk group, and general public.

Other projects include the production of Covid-19 test kits which can deliver results within 15 minutes, the reusable and washable face masks for Covid-19 and MP 2.5 dust.

The NIA is gearing up efforts to usher in a supply chain management system for medical equipment and other protective items, fostering links between manufacturers, warehouses and orders from hospitals and members of the public.

Mr Pun-Arj said the system would facilitate 5 million users who will be able to receive items they need directly without middlemen. The system is expected to be rolled out by this month.

Patai Padungtin, former president of the Thailand Tech Startup Association, said local startups need to adjust their business and become more agile in order to survive.

The outbreak is likely to lead to a major change in the startup ecosystem in Thailand, he said.

Several startups are crippled from the outbreak, including those in travel, event planning, property, personal assistance, accounting, human resources and sales.

If the crisis drags on, the startups who refrain from closing down may sell their platforms to foreign operators, he said, and the local startup scene could be dominated by foreign entities, much like what happened after the 1997 financial crisis.

The local platform providers should adjust to fit to the present market, some may have to change targets or models of services.