Startups celebrate! Science Ministry joins SME Bank to give 1% loans
It’s not just SMEs who get access to low-interest loans from state banks. This assistance has now been extended to startups as the SME Development Bank hooks up with the Ministry of Science and Technology on an exciting new program.
Mongkol Leelatham, president of the Small and Medium Enterprise Development Bank of Thailand (SME Development Bank or SME Bank) said the bank was ready to support startups with low-interest loans through the government program, Local Economy Loans. The available funds total 50 billion baht, and the rate is only 3%, fixed for the first three years with an extended repayment period of seven years.
Another project is Thao-Kae 4.0 (“Tycoon 4.0”), which has 8 billion baht available with a fixed rate of only 1%, with a seven-year repayment period and a grace period for the first three years. Each lender receives up to 1 million baht, with the funds included in the government’s 2018 budget.
“This loan program is targeted at creating genuine occupational opportunities for entrepreneurs. Under the program, we consider potential and growth trends. Entrepreneurs need not prepare much documentation, nor have collateral. This unlocks new, small and medium entrepreneurs who could not access normal bank loans, because of these conditions.”
“This soft loan program will make startups flexible in their operations, with bilateral and network mechanisms. We add to the ecosystem and make it better.”
The government has had previous policies to promote SMEs, offering soft loans, knowledge and advice on business development to help in developing appropriate marketing strategies for SME customers.
A soft loan is a loan made on very favourable terms to the borrower.
At Startup Thailand 2018, held May 17-20 in Bangkok, among the technological innovations and exchanges between startups and investors, a memorandum of understanding was signed between the Ministry of Science and Technology and the SME Development Bank to develop startups and SMEs.
Assoc Prof Soranit Siltharm, Permanent Secretary for Science and Technology noted that this cooperation aims to upgrade technological competitiveness, marketing and management under the Economy 4.0 Project. The ministry’s Science Park has an incubator for startups and SMEs across Thailand, offering opportunities to access starting capital for rapid growth. Science Park provides support for the ecosystem, nurturing the growth and development of startups and SMEs
“The state is supporting startups to be economic warriors by not only supporting the big trees. We must tend the little trees’ growth as well to create economic value. The ministry will continue to be the driver of supporting technology, science, innovation and knowledge by finding partners to create opportunities with access to capital by entrepreneurs.”