MAJOR LENDERS ARE DOING MORE THAN OFFERING DEBT RESTRUCTURING SOLUTIONS TO SMEs

Pikun Srimahunt, head of Siam Commercial Bank’s mortgage business division and small-business products, said the bank would put more emphasis on how to help small enterprises sustain their business. Although the domestic economy is likely to improve this year, global uncertainties surrounding new US trade policies and Chinese tourism might have indirect impacts on small businesses in Thailand.
SCB previously has offered debt restructuring to small-business clients it feared could not endure the economic slowdown.
Outstanding loans in SCB’s small-enterprise segment have been maintained at Bt50 billion for two years as it had to concentrate on debt restructuring for several of its clients.
Small enterprises don’t have as much cash flow as medium-sized businesses, increasing the likelihood of non-performing loans. The NPL stood at 4.7 per cent, which SCB did not think the NPL this year will down from the current.
About 80 per cent of the 50,000 small-business clients at SCB are self-employed and the rest are registered enterprises. SCB defines a small business as one with annual revenue of no more than Bt75 million.
SCB is finding ways to help its clients improve cost efficiency and sustain sales amid the current economic slowdown. Pikun said registered small enterprises that are in the supply chain and e-commerce businesses were the key focuses of SCB lending, as they are able to grow in line with the digital era and the government’s “Thailand 4.0” policy.
There are 440,000 registered small enterprises in Thailand, and 4 million businesses in the “self-employed” segment. SCB has been catering to the overall small-business segment in the past few years, and believe it still has room to grow in this area if it has the proper solutions for clients, especially those in e-commerce and supply chains.
SCB projects that outstanding loans in the small-enterprise segment could grow by 4-7 per cent this year, about the same as overall outstanding loans.
Luechai Chaiparinya, first executive vice president and head of the retail strategy product and segmentation group at Krungthai Bank, said the bank had sent teams to survey small enterprises in provinces near the special economic zones. The government wants KTB to provide assistance to small businesses that have potential but might not be able to access funding.
“We have to relax some conditions for small businesses that are running on cash. The bank must have ways to know their incomes help them get financing. However, the bank will focus more on registered than unregistered small businesses,” he said.
KTB defines a small-business client as one that requires a loan not exceeding Bt20 million. The bank expects to launch new financial products specifically for small business next quarter, Luechai said.
KTB’s small-enterprise loan portfolio is Bt98 billion, for which it projects loan growth of 4-5 per cent this year.