KBank, TAT link up to help out small tourism operators

“They are family businesses and can’t access financial sources. They have to rely on loan sharks, and when tourism witnesses problems, they will have a higher burden than larger operators,” said Pakorn Partanapat, an executive vice president of KBank. “The project is a solution to help them become sustainable operators.”
Tourism is among the industries that might suffer from the European debt crisis, he said.
Some tourism operators have shifted to approaching emerging markets such as China, South Korea, India and Russia instead of the euro zone.
Small enterprises might run into a bigger liquidity crunch from the European crisis and the economic uncertainties than medium and larger operators.
The project will support small operators by providing access to financing sources, advice on marketing and seminars to educate them on the tourism business.
The project, “K-SME Tourism Solutions”, targets five businesses – guest houses, restaurants, car and boat rentals, tourist guides and souvenir shops – that need working capital and funds for investment.
About 13,000 operators are expected to use K-SME Tourism Solutions, representing loans of Bt4 billion in the first year.
Tourism loans currently account for Bt15 billion or 4 per cent of KBank’s small and medium-sized enterprises portfolio.
KBank has 200 SME customers with sales of more than 20 per cent from exports. They generate Bt6 billion or 6.6 per cent of the total exports of Thai SMEs.
SME customers that export to Europe account for 3-7 per cent of total loans, which is not much.
KBank has lent Bt3 billion to SMEs exporting to Europe. Most are in the gem and jewellery, agricultural, furniture and garment industries.
Domestically, the severe flooding has now spread to 25 provinces, where the bank has about 7,000 customers with loans of Bt60 billion.
However, from the bank’s survey, only about 10 per cent are flood-affected customers with loans of Bt6 billion.