KBank not expecting big demand from SMEs for new loans
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Kasikornbank expects small and medium-sized enterprises will require a relatively low level of new lending for rehabilitating flood-affected businesses because they are largely engaged in trading and most are non-asset companies, unlike large corporates.
The overall demand for loans to restore the flood-affected operations of SMEs accounts for between Bt65 billion and Bt140 billion, most of which is supported by state-owned banks.
KBank executive vice president Pakorn Patanapat yesterday said the bank did not expect its own lending for repairing SME businesses to be very high.
Most affected SMEs prefer extending their credit lines to asking for new loans. However, some enterprises lacking liquidity can be assured of receiving a quick credit line to improve their operations after the floods subside, he said.
He added that KBank loans for restoring businesses affected by floods would entail a fixed interest rate of 4 per cent for the first three years.
The bank will also join the loan-guarantee programme of the Small Business Credit Guarantee Corp (SBCG), the agreement for which will be signed soon.
The Cabinet approved Bt120 billion worth of lending to assist flood-hit SMEs through the SBCG, with a fixed interest rate of 3 per cent for the first three years.
SMEs entering the programme will benefit from an extended maximum debt-repayment period of 10 years, from the normal five to seven years.
KBank expects to grant loans of Bt10 billion to SME customers taking part in the programme, Pakorn said.
Apart from the SBCG programme, KBank customers are expected to seek loans of Bt5 billion for repairing flood-damaged businesses.
At present, 1,644 SME customers representing Bt14.3 billion in loans have asked for financial measures from KBank, with the majority wanting the bank assist in debt-repayment extension.
With KBank expecting economic growth to return in the second quarter, and 2012 gross domestic product projected to grow by 4.3 per cent, SME lending growth for next year will be re-evaluated by the bank, the executive said.
SME loans this year should grow by just 7 per cent because of the plunge in lending during the final two months due to the flooding.
