SME BANK HELPS GEM TRADERS STAY AFLOAT

       Several gem and jewellery traders have been saved from grinding to a halt by an infusion of liquidity from the Small and Medium Enterprises Development Bank.
       "Gems and jewellery are the hardest hit by the export downturn, as they are considered as luxury goods. Enterprises have faced a liquidity crunch.
       "The government will continue to promote the industry's growth as it supports more than 2 million workers," Deputy Commerce Minister Alongkorn Ponlaboot said yesterday.
       The Commerce Ministry cooperated with the Finance Ministry yesterday to kick off the Gems Bank project with the objective of extending Bt3 billion-Bt5 billion in working capital loans to the industry.
       Gem and jewellery traders have depleted their cash resources after running into business difficulties when exports and domestic sales plunged amid the economic downturn.
       Loans provided by the SME Bank would underpin the industry's growth after it shrunk dramatically during the global downturn, Alongkorn said.
       According to the Export Promotion Department, exports of gems and jewellery including gold increased 25.4 per cent to US$5.6 billion (Bt191 billion) in the first seven months of the year.
       However, gem and jewellery exports excluding gold sank 23.4 per cent to $2.12 billion.
       Gold accounts for 62 per cent of the total export value of the sector.
       Gems and jewellery are the country's second largest export earner after computers and parts.
       Alongkorn said the Gems Bank project should help inject circulating funds into enterprises in the sector and retain employment in the industry.
       Under the Gems Bank project, SME Bank will estimate the value of gems and jewellery held by traders as their collateral for credit.
       The gems and jewellery identification and grading company will estimate the value of the products so that traders would not have to put up other assets to access this loan programme.
       The bank has not yet finalised the qualifications for borrowers, such as whether they have to be a member of the Thai Gems and Jewellery Traders Association.
       Wasuwat Chaiyakul, vice president of the Chanthaburi Gems and Jewellery Traders Association, said many SMEs, particularly in his province, which is a major source of jewellery, lack liquidity.
       "The loans provided specifically to the industry should help increase liquidity for many enterprises. Besides the 300 or so members of the association, a thousand SMEs are seeking loans to improve their cash flow and prepare for the return of economic growth," he said.
       He pointed out that as the world economy remains sluggish, foreign buyers have placed smaller orders with SMEs.
       The loan and flexible qualifications required for collateral should help buoy the industry.
       On average, each trader needs Bt3 million to Bt10 million to continue operating as the economy picks up, he said.