New Draft National Credit Guarantee Agency Act Targets Efficiency and Broader Access to Capital for Entrepreneurs

On 19 August 2025 the Thai Cabinet, acting in collaboration with the Bank of Thailand and the Ministry of Finance, approved the Principles of the Draft National Credit Guarantee Agency Act (“Draft NaCGA Act”). This legislation is a significant step toward modernizing Thailand’s credit guarantee framework and improving financial inclusion for businesses.¹ 

The primary goals of the Draft NaCGA Act are to improve operational efficiency, ensure fiscal sustainability, and provide greater support to small and medium-sized enterprises (“SMEs”) and micro-entrepreneurs. By doing so, the Draft NaCGA Act will give businesses access to a broader range of funding sources, at appropriate, risk-based financial costs, and thereby drive economic resilience and competitiveness.

Under the Draft NaCGA Act, it establishes the National Agency for Credit Guarantees (“NaCGA”), a legal entity with the status of a state agency. However, the NaCGA will not be either a government department or a state-owned enterprise. NaCGA’s unique status will give it more flexibility and responsiveness, and permit it to offer diverse credit guarantee. In addition, NaCGA also will manage a centralized credit risk database, to improve risk assessments and the provision of guarantees, aligning Thailand’s practices with international standards.

NaCGA will address key limitations of the current credit guarantee system, which faces two major issues, including:

(1)    the fact that guarantee fees currently are not calculated based on risk levels (by introducing risk-based pricing), and 
(2)    the lack of a database for analyzing the credit risk and repayment capacity of business operators.² 

Currently, the Thai system relies mainly on a Portfolio Guarantee Scheme (“PGS”) and applies a uniform guarantee fee rate to all borrowers. This means some borrowers pay higher costs than their actual risk status justifies. In addition, the current mechanism cannot meet the diverse liquidity needs of businesses because it only guarantees loans from specialized financial institutions, and does not cover borrowing from other sources, such as non-bank lenders.

With the new legal framework, SMEs will gain better access to funding that aligns with their risk profiles. They also will be able to raise capital through multiple channels, not only through banks but also via the capital market. This will support the development of a more inclusive and resilient financial system.

According to the public hearing summary, NaCGA will guarantee transactions beyond those provided by commercial banks, specialized financial institutions, or non-bank financial institutions.³  This includes loans through the issuance of debt instruments or securitization transactions via special purpose vehicles (“SPVs”).
The Draft NaCGA Act may also expand the scope of certain definitions:

• Lenders: 
  To include legal entities that engage in the granting of credit as a normal trade, such as leasing companies and personal loan providers, which are not financial institutions (non-bank entities).
• Business Operators: 
  To include social enterprises organized under the Social Enterprise Promotion Act B.E. 2562 (2019) and individuals engaged in business activities. The definitions will not adhere to those in the SME Promotion Act, but will be determined by the Policy Committee.
  It is important to note that these definitions and other relevant provisions may change when the NaCGA Act is officially published in the Government Gazette. Lenders and business operators should remain informed and prepare to adapt, to comply with the NaCGA Act and take advantage of the new opportunities it offers.

¹Guiding Principles for the Public Consultation on the Draft National Credit Guarantee Agency Act B.E. …
²Public Hearing on the Principles of the Draft National Credit Guarantee Agency Act B.E. …
³Summary of the Public Hearing on the Principles of the Draft National Credit Guarantee Agency Act B.E. … 

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or any other areas of law, please contact:

Nuttaros Tangprasitti
Partner

Junjura Boonsomsuwan
Associate

Authors