THURSDAY, March 28, 2024
nationthailand

Banks expect resurgence in SME lending under stimulus schemes

Banks expect resurgence in SME lending under stimulus schemes

COMMERCIAL banks are upbeat about the government's Bt100-billion soft-loan programme and the new guidelines for loan guarantees as they believe these stimulus measures will spur demand for loans and attract small and medium-sized enterprises into the form

The Government Savings Bank yesterday signed a memorandum of understanding with 18 financial institutions. Under the soft-loan programme, GSB will lend a total of Bt100 billion to commercial banks, which will re-lend the money to SMEs at an interest rate of 4 per cent per annum for seven years.
Yol Phokasub, president of Siam Commercial Bank, said it expected its new loans to SME clients this year would reach Bt120 billion, up from the previous forecast of Bt100 billion, with the additional Bt20 billion stimulated by the soft-loan and loan-guarantee programmes.
The latter is under the auspices of the Thai Credit Guarantee Corporation.
In the first half, SCB granted Bt50 billion in new loans to SME clients, he said. The new criteria for loan guarantees will ease the bank’s worries over lending to SMEs, while the low interest rates for the soft loans will encourage SMEs to enter the official financial system.
Only 700,000 of the country’s 2.7 million SMEs are in the financial system, which means about 2 million businesses are saddled with high interest burdens charged by lenders outside the system, Yol said.
The SME loan portfolio at SCB is expected to reach between Bt360 billion and Bt370 billion this year, up from Bt340 billion in 2014.
TMB Bank expects new lending of Bt50 billion to SMEs, of which Bt25 billion will be under the two stimulus schemes, said Trirong Butragath, chief SME banking officer.

Bangkok Bank to help SMEs
Bangkok Bank hopes to lend around Bt20 billion under the two programmes, planning to help SMEs that are lacking liquidity and those that want to expand, said Siridej Aungudomsin, senior executive vice president.
These schemes will help increase demand for loans among SMEs, said Sayam Prasitsirikul, head of SME Banking at Krungsri. Year to date, Krungsri has seen flat growth in SME lending due both to a lack of demand and the bank’s own tighter loan-approval criteria. As a result, the bank may have to lower its growth forecast for SME loans this year.
Krungsri had projected loan growth of 11 per cent for its SME banking business this year.
Still, Sayam said the government’s SME stimulus package could boost demand for loans and the activities of SMEs during the fourth quarter.
“The SME loan portfolio at Krungsri might hit Bt200 billion, up from the expected Bt196 billion to Bt197 billion. We will have to wait and see.”
Jiratchyuth Amyongka, head of the commercial banking group at CIMB Thai Bank, said it had pre-screened SMEs that require Bt1 billion worth of loans in total. However, the bank expects new lending of Bt3 billion to Bt4 billion thanks to the soft-loan and loan-guarantee programmes.
Somporn Timsaeng, owner of TS 2000 Group, an SME that runs a trading business, said he wanted to apply for a soft loan with the interest rate of 4 per cent as his business was facing a lack of cash flow.
His company imports home appliances from overseas to sell in Thailand, but the decline in consumption has affected sales revenue.
“Each month, sales revenue dropped by 50 per cent, so I need a loan through this scheme to help improve my company’s cash flow,” he said.

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