Laid-off workers and unemployed new graduates can seek financial assistance from a new 10-billion-baht loan programme initiated by the Bank for Agriculture and Agricultural Co-operatives.

The programme will offer loans to help unemployed workers start new business ventures, and is one of several measures initiated by the Abhisit Vejjajiva government to jumpstart the economy.

Ennoo Suesuwan, the BAAC acting president, said the state bank would allocate four billion baht for loans to 100,000 recently laid-off workers and six billion for 150,000 new graduates. Workers applying for the programme must be certified to receive unemployment benefits from the Social Security Office or the Education Ministry.

Loans will be capped at no more than 40,000 baht per person, with the aim to promote small-scale entrepreneurship, such as One Tambon, One Product (Otop) sellers or food vendors.

Interest rates for loans to laid-off workers will be set at 6% per year, as the Social Security Fund will deposit four billion baht in funds to help reduce financing costs for the programme. Loans to new graduates will be charged at market interest rates.

“The programme aims at assisting laid-off workers and new graduates to start small businesses in their rural hometowns. The BAAC will help them in terms of know-how, as we have these skills in the farm sector,” Mr Ennoo said.

Pan Wannapinit, the SSO secretary-general, said the fund was also considering extending unemployment compensation benefits to laid-off workers to eight months from six months now.

“We hope that by the ninth month, the beneficiaries will be able to find jobs or own small businesses,” he said.

Labour Minister Paitoon Kaewtong said the ministry would propose that the Finance Ministry waive withholding taxes collected on unemployment benefits paid to laid-off employees.

He said that 50,000 workers were laid off by 600 companies in the fourth quarter of 2008. The figure could jump to 200,000 for the first quarter of this year as the domestic and global economies continue to slow.

The Labour Ministry is seeking five billion baht in additional funds from a new 100-billion-baht supplementary budget to finance job-training programmes and organise job fairs.

The government has made addressing unemployment one of its top economic priorities. Industry groups fear that unemployment could more than double to over one million people by the end of the year. A large proportion of unemployed workers are expected to be new graduates unable to find work.

Assoc Prof Piniti Ratananukul, deputy secretary-general for the Commission on Higher Education (CHE), said that 300,000 new university graduates would enter the job market this year.

Of the total, 70% are humanities students, 25% science and technology and 5% in health science.

New graduates seeking assistance under the BAAC programme must pass vocational training courses certified by the Commission on Higher Education.