The Japan Bank for International Cooperation (JBIC) has signed an untied loan agreement totalling up to the yen equivalent of US$80mn with the Small and Medium Enterprise Development Bank of Thailand (SME Bank).

The loan is co-financed with Mizuho Corporate Bank (agent bank), Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation (SMBC) and Sompo Japan Insurance. JBIC will provide a guarantee for this co-financed portion.

The loan will strengthen Japanese business operations in Thailand by financing the development of SMEs that support local Japanese affiliates. SME Bank will act as an intermediary. The loan is expected to improve the affiliates’ local supply chains and expand their markets.

The Japan-Thailand Economic Partnership Agreement (JTEPA), on whose major elements agreement in principle was reached in September 2005, called for bilateral cooperation in the SME sector.

JBIC is committed to strengthening bilateral cooperative ties through further improvement in the investment climate for Japanese businesses.

Japanese investment in Thailand has been increasing rapidly, especially in the automobile and electronics industries. Over 1,250 firms are registered with the Japanese Chamber of Commerce in Thailand. This figure rises to 6,650 when SMEs are included.