Finance Ministry mulls National Credit Guarantee Institution

The Finance Ministry is considering the setting up of a National Credit Guarantee Institution, to enable members of the public to borrow from financial institutions, according to Deputy Finance Minister Paopoom Rojanasakul.

The ministry will also propose the establishment of an International Money Holding Centre, aiming at making Thailand a regional financial hub, like Hong Kong, Dubai and Singapore.

Paopoom explained that the proposed National Credit Guarantee Institution would guarantee a new form of credit, under which the borrowers would be required to pay a fee, similar to an insurance premium, and the government would provide a counter-fund to reduce risk when extending personal loans or loans to businesses.

He said that the government or governmental agencies would issue a certificate to guarantee the creditworthiness of the borrower to the lender, to assure them that the borrower’s commitment will be honoured, adding that he believes that the National Credit Guarantee Institution can be established next year.

Regarding the proposed International Money Holding Centre, Paopoom said that a bill will have to be proposed to Cabinet. The centre would be authorised to regulate banking, securities, futures, digital assets and insurance as a “One Stop Service”.

He assured, however, that the new entity would not take away the regulatory powers of the Bank of Thailand or the Securities and Exchange Commission, but would have power over international currencies.