By THE NATION
“We are confident that the need for loans will continue to grow, especially in e-commerce, which is averaging 10 per cent growth per annum,” he said.
“Food and service-related businesses saw the most increase in demand in the past year and that also led to entrepreneurs applying for loans to upgrade production capacity, such as buying new machines.”
Veerasak added that due to the appreciation of the baht, several industries are importing more machines, especially automation type that helps reduce the reliance on human labour, in markets currently suffering from shortage of skilled labour.
“The bank still employs moderate caution when considering loans to SMEs, which are generally more fragile than large-scale industries,” said Veerasak. “For SMEs to stay afloat, they need to maintain a low cost and be unique in order to stand out from competitors.”
Bangkok Bank also estimated that non-performing loans (NPLs) from SMEs in 2020 should not exceed the bank’s overall NPL of 3.4 per cent.
“One of our measures to help SME operators is to adjust the type of loan to allow customers to pay cheaper interest and fees,” he said. “For example, when we change credit card debt to term-loan debt, the interest rate effectively goes down from 18 per cent to 6.25 per cent. This should not affect the bank’s NIM (net interest margin), since we still have other products that will benefit from SME operators who are still in business instead of becoming an NPL.”