Financial institutions to issue commercial credit cards for non-juristic SMEs

BANGKOK, July 7 (TNA) — In an attempt to enable cash-strapped small- and medium-sized enterprises (SMEs) to pay for their purchases of goods and services, the Bank of Thailand (BoT) later this week will announce a service allowing financial institutions to provide overdraft privileges to non-juristic person SMEs, a senior BoT official said.

Deputy Governor Bandid Nijathaworn said the BoT had decided to relax regulations on credit cards issued to SMEs and will announce allowing financial institutions to issue commercial credit cards to non-juristic SMEs.

Presently, such cards are issued to only juristic firms, he said.

The issuance of commercial credit cards to non-juristic SMEs will help lower risks and simultaneously create confidence to goods and services suppliers since the amount of cash would have been approved earlier by financial institutions, Mr. Bandid said.

Also, the system will see cash flow moving faster since money would be deducted directly from purchased goods and services, he said.

Non-juristic SMEs who already are bank customers can apply for the card while the amount of money in credit and interest rate to be charged will be up to their business potential, said Mr. Bandid.

He said SME operators holding credit cards now account for about 40 per cent of all bank customers. (TNA)