Summary of Concerns & Proposals Regarding Thai SMEs & restaurant Businesses (100% Origin)
this document details teh concerns of Mr. Sorathep Rojpojanarat, President of the Restaurant Business Owners Club, regarding the economic challenges facing Thai SMEs, particularly restaurant businesses, and proposes solutions for government support. His views align with the government’s direction of investment,especially in renewable/clean energy and related international trade.
Key Concerns:
* Impending Cash Flow Crisis: Restaurants, especially SMEs, are facing a critical cash flow shortage expected to worsen substantially in early 2025 due to slow tourism and a weak economy. Manny have only 3 months of operational funds remaining.
* Collateral Issues: Entrepreneurs lack sufficient assets for collateral, having already used them to secure loans during the COVID-19 pandemic.
* Rising SME Debt: Overdue debt (Stage 2) is up 15% and bad debt (Stage 3) is up 9%, indicating a fragile system with many businesses operating as “zombies” and at risk of becoming Non-Performing Loans (NPLs).
* Access to Capital: The loan application process is overly complex, leading to frequent rejections despite initial investment in design and construction, causing meaningful financial damage.
* Digital Adaptation Challenges: While supportive of government initiatives like digital platforms and POS systems, many small, older, and non-VAT registered restaurants are not yet prepared for these changes and require support and understanding.
Proposed Solutions & requests to the government:
* Dedicated Credit Line: Establish a specific credit line of approximately 30 billion baht specifically for restaurant businesses,separate from general SME loans,to ensure direct access to funding.
* low-Interest Loans & Guarantees: Continue and expand the Ministry of Finance’s low-interest loan (soft loan) measures and TCG guarantees,recognizing the lack of collateral.
* Debt Relief Measures: Implement a temporary suspension of principal payments, allowing businesses to pay only interest for 1-2 years, followed by a gradual return to full payments, to prevent NPL status.
* Simplified Loan Criteria: Adjust loan application criteria to make it easier for SMEs to access credit and strengthen the overall economy.
* Support for Digital Transition: Provide understanding and compensation to help smaller,less digitally-equipped restaurants adapt to new technologies.
* Investment Support: The speaker acknowledges and supports the government’s investment direction, particularly regarding renewable/clean energy and its link to international trade, but emphasizes the need for accessible funding to enable SMEs to participate and benefit.
In essence, Mr. Sorathep advocates for increased liquidity and financial support for SMEs, particularly restaurants, to navigate current economic challenges and capitalize on government-supported investment opportunities. He stresses the importance of addressing the systemic issues hindering access to capital and facilitating a smooth transition to new technologies.
