Tbank to step up on loan growth from small rural companies

Thanachart Bank plans to accelerate loan growth in its SME portfolio from small enterprises in the provinces, while Siam Commercial Bank (SCB) believes the Asean Economic Community (AEC) will help drive trade volumes in border provinces.
Jiratchayuth Amyongka, head of SME banking at TBank, said small enterprises would be the key drivers of its SME lending next year, with growth from this segment projected at 40 per cent. Meanwhile lending to medium-sized enterprises is expected to grow by 12-15 per cent and to large corporates by 5 per cent.
Chief executive officer Somjate Moosililert said much of the loan growth to small firms would derive from hire-purchase businesses.
TBank has soft-launched lending products for small companies in the
 past 10 days at 300 branches, with more than 100 loan applications.
Pre-approval for small enterprises will be cut to two days from 45, Jiratchayuth said.
He said the bank had focused more on small customers because in the SME portfolio, these are the greatest borrowers.
“These are general vendors for which housing is their only collateral, unlike medium-sized or large companies that have many assets as collateral. The small customers always secure their collateral, so the chance of bad loans from this segment is less,” he said.
TBank provides credit lines of no more than Bt10 million to small companies. The credit line for medium-sized companies is set at Bt10 million to Bt50 million and more than 50 million for large companies.
Jiratchayuth said the bank hoped for Bt5 billion in new loans in the small-client segment in the remaining five months of the year.
Of the 30,000 companies in TBank’s SME portfolio, 25,000 are small firms, but they account for only 19-20 per cent of the loans.
Jiratchayuth said the bank targeted SME loan growth this year of 15-18 per cent from outstanding loans of Bt83 billion.
To achieve the targeted lending growth from the small-client segment, TBank will aggressively pursue business in the provincial markets, because many SMEs upcountry are unable to access funds.
Customers in the provinces are expected to apply for loans of Bt1 million to Bt2 million while businesses in Bangkok seek to borrow Bt4 million to Bt5 million.
Sirichai Sombutsiri, senior executive vice president of SCB, said trade volumes in border provinces were higher, especially in agricultural products, movement driven in anticipation of the AEC.
Lending in the provinces is 50 per cent of SCB’s total SME portfolio, and the bank believes the trade volumes in bordering countries will be sharply increased when the AEC is effective.
Sirichai said SME loans this year were expected to expand by 23-25 per cent or between Bt45 billion and Bt50 billion, exceeding the target by 5 per cent, after lending year to date was Bt40 billion.