Bangkok: The SME Bank has announced a collaboration with Toyota Leasing to facilitate the purchase of pickup trucks by small and medium enterprises (SMEs). This partnership aims to provide loans and guarantees, bolstering the leasing industry while supporting the commercial pickup truck market.
According to Thai News Agency, Mr. Sitthikorn Direksunthon, Director and General Manager of the Small and Medium Enterprise Credit Guarantee Corporation (TCG), highlighted the challenges faced by SMEs in securing funding due to economic volatility. Increased rejection rates from banks and leasing firms have posed significant hurdles. The collaboration with Toyota Leasing is designed to provide guarantees for hire-purchase loans for commercial pickup trucks, assisting SMEs, farmers, and small transportation businesses with irregular income streams to access necessary financing. This initiative not only supports the automotive industry but also aims to enhance the broader Thai economy.
The partnership is facilitated by a recent amendment to the Ministry of Finance's announcement, allowing the SME Bank to extend loan guarantees to non-bank lenders, leasing companies not affiliated with financial institutions, and captive finance companies. This change enables SME Bank to expand its support for SMEs and is paving the way for further partnerships with other auto leasing companies.
Under the "Krab Phi Mee Khlang Guarantor" program, SMEs can apply for leasing loans with Toyota Leasing, with the SME Bank acting as guarantor. Participants benefit from a three-year free guarantee fee, followed by a low fee of 1.5% per annum from the fourth to the seventh year. The program features a maximum guarantee period of seven years, with a maximum guarantee amount of 1.5 million baht per case. This initiative is aimed at easing loan access for SMEs and invigorating the auto industry, thereby contributing to economic growth.
The "Pickup Truck with Finance Guarantee" measure is a critical government strategy to facilitate SME access to loans through the SME Bank's guarantee mechanism. It aims to build confidence among financial institutions and increase loan approval rates for SMEs dependent on pickup trucks, including farmers, contractors, and food truck operators.
Mr. Suphakorn Rattanawaraha, Deputy Managing Director of Toyota Motor Thailand, emphasized the importance of SMEs to Toyota's sales and acknowledged the current challenges in the car market. Despite these challenges, the market is showing signs of recovery, supported by the extensive local supply chain, with the Toyota Hilux using 95% domestic parts. The partnership with SME Bank is expected to boost sales and support the Thai economy.
In the pickup truck market, sales from January to September showed a 15.3% decline, attributed to high loan rejection rates affecting consumer confidence. The SME Bank's loan guarantee is expected to improve loan accessibility and stimulate sales, benefiting the economy.
Ms. Chuenkomol Thapparangsi, President of Toyota Leasing (Thailand), noted that the TCG's loan guarantee mechanism significantly increases loan approval chances for customers who may not meet standard criteria. This initiative is expected to expand Toyota Leasing's customer base and promote loan growth among commercial pickup truck customers.
Mr. Saran Thongthammachat, Chairman of the Thai Hire Purchase Association, described the unlocking of non-bank leasing sector access to the TCG program as a new dimension for the Thai leasing industry. With 50% of pickup truck loans coming from non-banks, primarily captive finance, this collaboration is poised to elevate the leasing sector and broaden future cooperation with TCG in other projects, aiding SME loan access and revitalizing auto sales.
SMEs interested in purchasing a pickup truck can contact a nearby Toyota showroom to apply for a loan with Toyota Leasing, backed by the SME Bank's guarantee. Alternatively, registration is available through LINE OA: tcgfirst, free of charge.