Thai central bank sees loan guarantee scheme raising credit by $3.2 billion over 1-2 years

Thailand's loan guarantee scheme is expected to boost new credit by 100 billion baht ($3.22 billion) over the next one to two years, the country's central bank said on Friday, part of the government's efforts to support smaller firms.

The scheme, which will begin in January 2026, will offer guarantees for loans of up to 100 million baht for targeted small- and medium-sized businesses, and up to 150 million baht for corporates, the central bank said in a statement.

Bank of Thailand Governor Vitai Ratanakorn told a briefing that the funding will come from the remaining 20 billion baht of contributions to the Financial Institutions Development Fund, the central bank's rescue arm.

Vitai reiterated that lowering interest rates would not solve structural problems.

Last week, the central bank cut its key interest rate for the fifth time since October 2024, with rates down by a total of 125 basis points over the period.

-Orathai Sriring and Kitiphong Thaichareon