SME Bank loan programme seen as unlikely to shake commercial banks
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Commercial banks are optimistic that the nine loan schemes offered by the Small and Medium Enterprise Development Bank of Thailand (SME Bank) will help fill a gap rather than increase the competition in the banking industry.
Oranuch Apisaksirikul, chief executive officer of Tisco Financial Group, said that the focus of commercial banks was medium-sized enterprises, while SME Bank focused on small firms that might not be able to access funds.
The military-led government has a clear policy that the state-owned banks have the objective of helping small enterprises that don’t have collateral to get funding, which is a good way to drive the economy.
SME Bank last week announced nine loan schemes offering total credit of Bt19 billion to 10,000-20,000 SMEs nationwide.
CIMB Thai Bank Jiratchyuth Amyongka said this programme could help close the gap caused by the fact that commercial banks are unable to serve some SMEs, as the private banks primarily cater to strong enterprises.
“Each individual bank has a focus segment, while the clients also [prefer certain banks]. Therefore, we did not think this programme by SME Bank will shake up the competition in commercial banking much,” he said.
While it is true some major banks might be affected because they have a broad client base, some of which might seek assistance from the state-owned bank, CIMB Thai has a clear plan to cater to enterprises that want to get into the wider Asean market.
At present, CIMB Thai services 4,000 SMEs, of which 100 are doing business in Asean markets and hope to expand.
He said the bank was focusing on new SMEs with the ambition to get into the Asean market in terms of border trade and joint ventures in the region.
“The positive economy has motivated SMEs to speed up investments in inventory, and we believe the performance of SMEs will be better next year,” he said.
CIMB Thai is confident of reaching its loan-growth target of 22-25 per cent with outstanding loans of Bt54 billion this year, with net income of Bt1.2 billion, representing growth of 20 per cent.
