KTB pushing ahead with small-business loan product

“As the new player on the block, we cannot wait for the economy to recover. We should use this time to build awareness of the product,” said Tanyapong Thamavaranukupt, a first executive vice president at KTB.
“At least customers should know that KTB has this product on the shelf,” he said.
However, amid the economic uncertainty, the bank will have to step carefully because lending to small businesses is high-risk and can lead to non-performing loans (NPLs).
The bank targets Bt2 billion to Bt3 billion of new credit per month for sSME Generic Product, which is a suitable pace during this period of tepid growth.
KTB designed sSME Generic Product to tap small businesses with at least two years of operations under their belt. Credit of Bt10 million to Bt20 million is available.
KTB’s first-quarter net profit dropped by 5.2 per cent year on year to Bt7.86 billion, because of higher loan-loss provisions. Its NPLs rose by Bt10 billion after small-business and retail customers had trouble servicing their debts.
Managing NPLs is a challenge when the bank is counting on loan growth in these segments, Tanyapong said. The bank will have to speed up debt collection in attempting to lower NPLs.
Weerasak Sutanthawiboon, executive vice president of SME lending at Bangkok Bank, said the slower-than-expected expansion of the economy had hurt small companies. This kind of customer has caused an increase in special-mention loans at BBL in the first quarter.
Demand for credit from small and medium-sized enterprises is declining because they aren’t very busy. Consumers who are customers of SMEs are saddled with high debt burdens and cannot acquire goods like before.
Loan growth at BBL should be seen in its corporate rather than SME customer base.
However, the fix that SMEs are in should dissipate when the government starts spending, as that will help spur cash circulation in the system, the bank believes.