The Finance Ministry will seek cabinet approval to require financial institutions to contribute 0.001% of their deposit base to a fund tasked with promoting small and medium-sized enterprises (SMEs).
A legal amendment is needed for the contribution requirement, and the fund is expected to receive 100 million baht in contributions if the change takes effect, said an informed source at the Finance Ministry.
The contribution will be used to help SMEs that cannot access financial institution lending, the source said.
The Fiscal Policy Office has held a public hearing on the amendment, which requires financial institutions to make the contribution to the SME fund.
The amendment will enable the fund to use the contribution to finance debt-ridden SMEs, the source said, adding that the objective is to prevent SMEs' financial problems from snowballing and to reinforce stability of the country's financial and economic system as a whole.
Given that SMEs are the country's backbone and their lending accounts for one-third of total loans, financial institutions will be harmed if SMEs suffer financial problems, the source said.
Offering cash-strapped SMEs access to funding sources will benefit financial institutions themselves, the source said.
When the new contribution is added to financial institutions' current contribution, the total contribution will remain below the ceiling of 1% of the deposit base set by the amended Bank of Thailand Act.
Commercial banks are taxed at 0.47% of their deposits, of which 0.46% goes to repay the Financial Institutions Development Fund's debt incurred from bailing out financial institutions from the 1997 crisis. The remaining 0.01% goes to the Deposit Protection Agency.
The four state-owned banks are subject to a surcharge of 0.18% of their deposits for a fund to develop specialised financial institutions.
The source said that when SMEs turn around, the asset quality of financial institutions will improve, creating stability and confidence in the country's overall economy.
SMEs numbered 3.01 million in 2017 and created 11.75 million jobs. Their total value amounted to 6.04 trillion baht, equivalent to 42.2% of Thailand's GDP.
