KTB urges Thai SMEs to venture abroad

KTB’s SME loans in the first quarter will post lower growth than the target because the global economic slowdown has put pressure on purchasing power in the agricultural sector, which accounts for the majority of SMEs’ consumers in Thailand, he said.
This year, KTB targets SME loan growth of 9 per cent, but growth in the first two months was only 3 per cent, far below target, and Udomsak expects growth in the first three months will also be lower than targeted.
The international market is not looking positive for agricultural products, so purchasing power in this country remains weak. He said that SMEs, however, needed to expand their overseas reach because the prospects for growth in the domestic market are limited.
SME exporters should be cautious as foreign currencies are more volatile because of the divergent monetary policies of advanced countries, he said.
Since the Bank of Japan and the European Central Bank have resorted to negative interest rates, fund flows have moved to emerging markets, causing currencies in this region to appreciate.
In the second quarter, KTB will closely monitor the business ability of SMEs to prevent their non-performing loans from going over 2 per cent of the total.
“If a customer is only a day or two behind on an instalment payment, we will send a team to offer solutions to the barriers to doing business,” Udomsak said.
The bank is still finding new SME customers, especially construction and logistics firms that are part of the supply chains of corporate customers.
He said SMEs in the construction sector had good momentum in subcontracting jobs from government projects and private construction of property projects near mass-transit routes.
To help SMEs in the export sector, the bank has joined forces with the Commerce Ministry and the Industry Ministry’s Department of Industrial Promotion to launch the “SME Genius Export” programme to teach them how to undertake trade finance and how to open letters of credit.
Venturing into exports by themselves might not be safe for SMEs, so they should have mentors, he said.
The bank and state agencies will help Thai SMEs find partners via business-matching activities, he said.
Prasong Nilbanjong, deputy director-general of the Industrial Promotion Department, said that in the first phase, his department, KTB and the Commerce Ministry would bring 60 SMEs to conduct business matching in China, as consumer products, fashions and foods are have good potential for export to that country.
In the second half of this year, the department will bring 60 SMEs to do business matching in Myanmar. In that country, foods, alternative energy and substitute building materials are the top products from Thailand that should have good opportunities.