Thailand’s central bank announced on Friday that a government-backed loan guarantee program is projected to generate 100 billion baht in new credit over the coming one to two years, as authorities strive to bolster support for the country’s small and medium-sized businesses.
Set to commence in January 2026, the scheme will provide guarantees for loans of up to 100 million baht for select small and medium enterprises, and as much as 150 million baht for larger corporates, according to a statement issued by the Bank of Thailand.
Governor Vitai Ratanakorn disclosed at a briefing that the initiative will be funded from the remaining 20 billion baht contributed to the Financial Institutions Development Fund, which acts as the central bank’s rescue arm.
Vitai also emphasized that simply reducing interest rates would not resolve underlying structural challenges facing the Thai economy.
The government’s latest move comes after the central bank reduced its benchmark interest rate for the fifth time since October 2024, marking a cumulative decrease of 125 basis points over the period.
