Numerous Thai SMEs looking to shut down as financial burden heightens

Small and medium-sized enterprise (SMEs) across Thailand are considering shutting their doors due to a lack of access to the government relief measures to withstand the economic crisis caused by the Covid-19 epidemic.

A survey of 625 SMEs nationwide conducted by the University of the Thai Chamber of Commerce (UTCC) shows that 40 per cent of them are looking to quit their businesses.

Small businesses are the most vulnerable sector since the economy has been struck by the pandemic’s unprecedented effects, resulting in low purchasing power and rising household debt.

“Although the state has issued several steps to mitigate the damage, most SMEs are unable to access them,” UTCC president Thanawat Polvichai told a briefing. 

Thanavat cited a lack of collateral and inhibiting government requirements as challenges for SMEs to access government subsidies.

He urged the government to infuse another 200-300 million baht to provide additional cash to those SMEs so that they could keep operating.

Meanwhile, the Bank of Thailand (BOT) has been rolling out relief measures to mitigate the financial burden for Thais during the economic downturn such as debt restructuring, debt consolidation, and rehabilitation loans. 

The BOT had also adjusted some requirements to help SMEs be able to join those schemes. About 39,800 enterprises, 43 per cent of them are SMEs, have secured rehabilitation loans totaling around 127 million baht of credit, according to the bank’s data.

“Without further help, SMEs will be waiting for their final day,” Thanavat warned. 

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