The Thai government is preparing to draw nearly 40 billion baht from the Financial Institutions Development Fund (FIDF) to establish a new SME relief fund designed to reduce debt burdens and provide low-interest business loans to small and medium-sized enterprises (SMEs) struggling with liquidity issues.
This initiative is part of Prime Minister and Interior Minister Anutin Charnvirakul’s “Quick Big Win” economic policy, aimed at reviving Thailand’s economy within four months through five key pillars — stimulating tourism and consumption, resolving household debt, supporting SMEs, promoting savings, and building future industries.
Funding plan through FIDF contributions
According to the Ministry of Finance, the SME fund will be financed through the FIDF — the same mechanism previously used for the “You Fight, We Help” scheme. Under the proposal, half of the 0.46% annual contribution that commercial banks make to the FIDF (about 0.23%) will be diverted to create a central pool of approximately 39 billion baht annually for SME support and economic recovery programmes.
Each year, financial institutions contribute around 80 billion baht to the FIDF. Redirecting part of this contribution is seen as a fiscally neutral move, since it does not use taxpayer money or affect the country’s public debt ceiling.
However, critics warn that repurposing FIDF funds — originally intended to repay debts from the 1997 Asian Financial Crisis — could delay the Bank of Thailand’s (BOT) target of clearing those debts within six years, potentially extending repayment to as long as a decade.
Challenges facing SMEs
Officials noted that SMEs are facing multiple headwinds, including declining competitiveness, Chinese import pressure, and the aftershocks of the COVID-19 pandemic, which continue to suppress demand. Many smaller firms are also struggling to access credit as banks have tightened lending standards amid heightened risks and costs.
Once the household debt restructuring plan under the asset management company (AMC) model is rolled out, the government plans to immediately activate this third economic pillar — direct SME assistance through liquidity and low-interest funding.
Two funding options on the table
The government is currently considering two financing structures:
- Splitting bank contributions: Redirecting half of the annual 0.46% FIDF contribution (0.23%) toward SME support while continuing debt repayment with the other half.
- Creating a new central government fund: Establishing a state-managed pool dedicated to SME financing, with strict oversight to maintain fiscal discipline.
A long-term economic bridge
Authorities emphasised that the SME fund is not a temporary relief scheme but a long-term stabilisation measure. With SMEs accounting for over 70% of Thailand’s workforce and contributing more than 35% of GDP, policymakers see the initiative as a “critical bridge” to sustain grassroots businesses and prevent a broader economic slowdown.
The programme will link liquidity support with debt restructuring, helping viable SMEs avoid default and remain competitive. By doing so, the government hopes to strengthen Thailand’s economic recovery and ensure inclusive growth across key sectors.
