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SME NPLs soar as pandemic hits them hard

Non-performing loans (NPL) of small and medium-sized enterprises (SMEs) have risen to Bt229 billion, or 6 per cent of the country’s total loans, due to impact from the Covid-19 pandemic, the Federation of Thai SMEs said.

“Small and medium entrepreneurs have been suffering since the Covid-19 outbreak in Thailand in 2019,” said Saengchai Theerakulwanich, the federation’s secretary-general. “The Bank of Thailand has revealed that total NPLs of SMEs made up 6 per cent of the country’s Bt3.5-trillion total loans, or about Bt229 billion.

“Small businesses have been hit the hardest, especially small restaurants and tour operators, who have been ordered by the government to temporarily shut down their businesses in a bid to curb the outbreak,” he added.

SME NPLs soar as pandemic hits them hard

“Although the government has provided soft loans to SMEs totalling about Bt500 billion, only about 70,000 SMEs could access the loan, while the rest are not qualified due to the criteria set by financial institutions that provide them. The SMEs also had a hard time accessing the Social Security Fund, which is worth Bt30 billion.”

The federation is worried that the latest outbreak reported since last December will worsen the situation despite the arrival of the Covid-19 vaccine. “We estimate that it could be the third or fourth quarter of 2021 when the situation could return to normal for SMEs,” he said.

Saengchai added that there were about 3.1 million SMEs in Thailand who hire about 12 million people and contribute up to 35 per cent of the country’s GDP.

“SMEs are the foundation of the country’s economy, therefore the government must make sure that they can access financial aid during the new Covid-19 wave to mitigate the impact on their operations.”



Published : January 12, 2021