State banks told to focus more on small clients
Finance Minister Thirachai Phuvanatnaranubala has instructed all state-owned banks to focus more on small borrowers, after a World Bank finding that they tend to emulate commercial banks rather than advance the government's policy to expand access to fun
A ministry source told the Krungthep Turakij newspaper that Thirachai had notified all state-owned banks in writing to cater more to the grass-roots sector.
In his circular, Thirachai said people in many places were still shut out of funding while some state-owned banks were lending to large businesses, even though that segment is for commercial banks, the source added.
The World Bank has said in a study that these specialised banks do not serve their original purpose. Many concentrate on large loans in direct competition with commercial banks.
Thirachai has asked the Fiscal Policy Office (FPO) and the State Enterprise Policy Committee (Sepo) to reassess the specialised banks’ operations.
“Both units are now working on this, before new policies will be announced. The circular is a clear signal that they should put greater emphasis on small borrowers,” the source said.
Small loans account for 90 per cent of the Government Savings Bank’s portfolio, but only 70 per cent of the outstanding credit of the Islamic Bank of Thailand.
Businesspeople, academics and other experts are being invited to share their opinions on the issue before the FPO and Sepo submit suggestions on the appropriate roles for specialised banks to the finance minister. –
