Bank of Thailand sets out three steps to address SME credit crisis

Vitai Ratanakorn, governor of the Bank of Thailand (BOT), said at the TNN Future Forum 2026 that the small and medium-sized enterprise (SME) sector was facing a crisis.

Although SMEs employed about 13.6 million people, equivalent to 70% of total employment, and accounted for 35% of gross domestic product (GDP), SME loan growth had remained negative for 16 consecutive quarters.

Lending to large businesses, meanwhile, had begun to return to positive growth over the previous two to three quarters, reflecting a K-shaped recovery.

Vitai said SME growth had fallen to only about 1%, from 1.9% when GDP growth averaged 3.5%.

Loan rejection rates for SMEs were about 60-70% and could be higher for some groups.

The rejection rate was 78% for new SMEs with no financial history and 86% for businesses with an existing bad-debt record, possibly reaching 90% in practice.

Even among the top-performing 30% of SMEs, only 21% had access to credit, compared with 61% of large companies in the equivalent performance group.

SMEs also faced average interest costs of about 6.9%, compared with about 3% for large companies.

Data covering about 130,000 SME legal entities showed that 50% had closed by the time they had been operating for 10 years, while only 30% remained after 25 years.

SMEs established from 2013 onwards saw revenue rise from 100 to 127 over 10 years, below the 175 achieved by earlier generations of SMEs.

The BOT is therefore preparing action in three areas to reduce costs and risks in the credit system and connect SMEs that show potential with sources of finance.

First, it plans to launch a Credit Portal by the end of 2026 as a marketplace connecting SMEs with banks and non-bank lenders.

Second, it is developing a new credit-guarantee mechanism along the lines of the Thai Credit Guarantee Corporation (TCG).

The proposal is expected to go to the Ministry of Finance for consideration within three to four months, and the BOT hopes the mechanism can begin operating in 2027.

Third, it plans to use alternative data to assess the repayment capacity of SMEs with no financial history.

Separately, amid discussion of possible assistance for SMEs, Surapol Opasatien, an assistant executive at National Credit Bureau Co., Ltd. (NCB), wrote on his Facebook account, “Surapol Opasatien”, about an approach that might “go deeper than before”.

He said this followed a conversation with a female vendor while he was passing through the Thewet area.

She showed him information that had been processed with artificial intelligence (AI) on a mobile phone.

Surapol stressed, however, that the conversation did not constitute confirmation that such a measure had already been introduced.

The information indicated that assistance might focus on vulnerable SMEs affected by the war between the United States and Iran.

It cited February 24 as the relevant date.

It also said assistance would not cover borrowers with non-performing loans (NPLs) classified as Stage 3 whose debts became non-performing before June 1, because of concerns about moral hazard.

Credit might also be limited to no more than THB20 million at each financial institution.

The information also cited August 1 as a cut-off date without explaining what criterion it applied to, while performing Stage 1 borrowers who had undergone DR or TDR debt restructuring would need to have done so after February 28.

Surapol said these borrowers were still servicing their debts well but had a “scar” and had been affected by the war.

He observed that those still making payments reliably and trying to stay afloat might be dissatisfied with the condition.

The information also mentioned borrowers classified as SM or Stage 2 and NPL borrowers in Stage 3, with the latter required to meet the bad-debt date condition outlined above.

The form of assistance shown in the AI-processed information involved reducing instalment payments to 30%, or another proportion, for 12 months or another period, with the remaining amount to be dealt with near the end of the repayment schedule.

Surapol described the approach as a “flash promotion for lower instalments” and asked what would happen if the instalments paid were insufficient to cover interest and whether creditors might have to provide further assistance.

Surapol speculated that the assistance might be funded by money made available through delayed payments to the Financial Institutions Development Fund (FIDF).

He said he would later “speculate aloud” about how it might be implemented.

Details were still unavailable on the interest rate, how interest would be calculated on the 70% deferred for 12 months, how the money would be applied to repayments and whether the number of instalments would increase.

He suggested that those conducting a “dry lab” ask the SME federation whether the approach would address the issue and meet borrowers’ needs.