Thai Credit Guarantee Corporation (TCG) plans to guarantee 10 billion baht in lending to small and medium-sized enterprises (SMEs) hit by flooding.
The state-owned institution is now seeking the Finance Ministry's approval for the scheme, TCG president Vallobh Tejapaibul said yesterday.
As well as helping the firms access loans, it also seeks to ease financing to renovate damaged workplaces, he said.
TCG was set up to offer guarantees to SMEs, especially start-ups, to encourage banks to extend credit lines.
SMEs in areas declared flood-affected by government agencies will be eligible for the project.
Under the scheme, the government will shoulder a 1.75% annual fee for three years, while the TCG will raise its standard 18% cap to reimburse up to 30% of defaults.
TCG's current loan guarantees total 220 billion baht.
In 2013, the corporation expects to extend 84 billion baht in fresh guarantees, below its annual target of 100 billion.
TCG forecasts it will return a net profit of 300 million baht for 2013, following a figure of 250 million for the first nine months, with 3.6 billion in fee income over the year.
Non-performing guarantees total 3.6% of TCG's current credit support.
TCG's plans to help operators in the OTOP scheme, which promotes local manufacturing, are now under consideration by the Fiscal Policy Office (FPO).
TCG aims to offer Otop operators 10 billion baht in credit guarantees at a 1.5% annual fee safeguarding up to 25% of bad loans, said Mr Vallobh.
Over that last 22 years, TCG has provided 306 billion baht in collateral for loans.
But TCG aims to raise its outstanding guarantees to 600 billion baht by 2017, with new operations through portfolio schemes in cooperation with banks, said Mr Vallobh.