Repayment period upped for SMEs
TMB Bank has extended the repayment period of its SME loans to a maximum of 30 years, the longest in the banking industry, in a bid to boost such loans by 40 per cent this year.
Paphon Mangkhalathanak, head of the bank’s business for small and medium-sized enterprises and supply chains, said yesterday that it was offering “TMB SME 30 Plus 3” loans for investment or refinancing with a term of 30 years, compared with seven years in the banking industry.
The maximum loan is Bt20 million.
The interest rate is 3 per cent in the first three years and MLR (minimum lending rate) plus 2.00-2.25 percentage points in the remaining years.
A screening and approval system is in place to ensure the new product will not create more non-performing loans.
SME customers had been granted loans only for buying assets but since they also need working capital, TMB has tripled the amount of liquidity to support them.
The new product is expected to draw in Bt15 billion worth of new SME loans this year, and the SME loan portfolio is expected to expand by 35-40 per cent from Bt100 billion currently.
SME lending has been accel
erated this month after showing sluggish growth of 3-4 per cent.
“Our SME lending in the first quarter could rise by 6-7 per cent year on year. We must push lending in the remaining quarters by 10 per cent each to achieve the target,” he said.
“The new programme is part of the plan to drive loan growth, since we want to increase SME loans to one-third of the total loan portfolio at TMB Bank within five years from 25-30 per cent currently.”
The increase in the minimum wage next month might jack up the operating costs of SMEs and some might need more working capital.
Small and medium-sized enterprises should quickly adjust by cutting costs, because the bank is concerned that if they cannot adopt cost |management before the implementation of the Asean Economic Com-munity in 2015, they will face difficulties in beating their rivals in region, Paphon said.
