SMEs yet to draw credit from KBank

KBank has been approved for Bt2 billion in soft loans administered by the Government Savings Bank, but although several small and medium-sized enterprises have successfully applied to KBank for the scheme, none have actually taken out any money yet, said Patchara Samalapa, executive vice president for SME business.

SMEs interested in the programme must apply for it before the end of the year, and lending under the scheme will end on March 31, 2016. 

Last month, KBank said it aimed for Bt60 billion in new SME lending this quarter, of which Bt30 billion would be under the government’s soft-loan scheme and the rest under the bank’s own programme. KBank has offered its own soft loans totalling Bt2 billion, with interest rates ranging from 4 to 7 per cent for the first six months.

Patchara said SME clients were more interested in the government’s soft loans than in the bank’s own programme.

“Many customers have asked the bank about the soft loans, and around 1,800 SME clients have applied for Bt15 billion worth of loans from KBank. We expect around 70-80 per cent of those will be approved,” he said.

Most SMEs that applied for the soft loans required credit lines of around Bt8 million. If they had borrowed that much before the soft loans were available, they would have been charged interest of 8-9 per cent per annum, so the 4-per-cent rate under the programme means a significant reduction of their financial burden. However, it also means there will be less profit for the bank from this segment, he added. KBank is the market leader in the SME loan segment, with a portfolio of Bt540 billion. About 70 per cent of its 120,000 SME customers have been paying interest of more than 6 per cent per annum.