KResearch ups SME loan growth target to 7.5%
Assistance, rise in consumption cited
Kasikorn Research Centre has revised upward SME loan growth to 7.5 per cent this year from 6.5 per cent as it believes SMEs will benefit from the assistance measures and the expected recovery of domestic consumption ahead of the economic roadmap.
Thanyalak Vacharachaisurapol, head of money and banking, said yesterday that the research house has seen a clearer picture of the SME situation as the first sector to benefit from the National Council for Peace and Order’s priority to boost the economy through rice payments.
KResearch had been expecting SME loans to grow not more than 6.5 per cent because the political unrest and the delayed payments to rice farmers would seriously hit SMEs.
At a growth rate of 7.5 per cent, outstanding SME loans should reach Bt4 trillion this year, up from Bt3.7 trillion last year.
Annual loan growth in the SME sector in past years was in the double digits.
State agencies and the banking industry are jointly offering measures to assist SMEs, such as the planned increase in guarantees for SME loans from the 18-per-cent limit of the Thai Credit Guarantee Corporation to 50 per cent.
Manufacturing/export
The measure will enable SMEs to carry on their businesses for the rest of this year.
Loan demand among SMEs had been expected to come solely from the manufacturing and export sectors but after the rice payments, KResearch anticipates the prospects for domestic spending will improve.
SMEs in the export sector account for 24 per cent of all SME loans in the banking industry. The sector is gradually improving thank to strong demand from developed markets such as the US and the European Union.
SMEs in agri-business including fertilisers and equipment are expected to require liquidity in the second half of this year to prepare for the revival in consumption.
The fiscal 2015 budget and the economic roadmap are restoring the confidence of consumers, who have resumed spending. This is positive news for SMEs in wholesaling and retailing, which account for 27 per cent of all SMEs loans in the commercial banking system.
Another industry that should gain from the roadmap is building and construction.
SMEs in the tourism industry, which account for 5 per cent, are expected to rebound soon as the Tourism Authority of Thailand plans to launch measures to boost tourism in the second half.
