TMB Bank offers new loan product for small businesses to pave way for economic recovery
TMB Bank has launched a new product to help small businesses get the working capital they need in preparation for a revived economy, even as major banks make such funding difficult to access
Even though the economy shows signs of recovering this quarter, several small enterprises that require working capital to prepare for resuming their businesses are distressed by the difficulty of getting funds, as the big banks have tightened loan conditions, said Trirong Butragaht, chief SME banking officer at TMB Bank.
Small businesses with annual turnover of no more than Bt50 million have been affected. TMB, however, sees this as an opportunity to lure new customers away from the major banks, he said. Refinancing is one target area, and the bank has set up a working-capital consultant team to help small and medium-sized enterprises keep going amid the economic slowdown.
TMB Bank has designed a new product called “SME 3 Times Plus”, highlighting a credit line of three times the value of a client’s collateral, 50 per cent more credit than SMEs normally receive from TMB, and a 30-day credit-line reserve.
Trirong said that the objective of the new product was to expand the customer base. The target is 2,000-3,000 new customers and new loans of Bt10 billion by the end of this year.
He said TMB had not targeted much loan growth from the SME sector, as this is not a practical goal during a period of slow economic growth. “We should help SMEs, especially those that have been affected by the loan tightening from other banks, as we hope that when they can set up business, we will be their main bank,” he said.
With an SME loan portfolio of around Bt200 billion, TMB ranks fifth among commercial banks in this segment. This year, loan growth for TMB’s SME Banking department should be in line with the bank’s overall lending growth of 6-8 per cent.
Existing SME clients can apply for the new product as well, since the bank wants to help small businesses get working capital while the economy is recovering.
Trirong said that to mitigate risk, under the terms of “SME 3 Times Plus”, the business must remain in operation for at least two years, must maintain its loan payments for three years, and must not require debt restructuring for two years.
