FRIDAY, March 29, 2024
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Exim Bank to shore up support for SMEs active in SEZs

Exim Bank to shore up support for SMEs active in SEZs

The state-owned Export-Import Bank of Thailand will lower its interest rates to support small and medium-sized enterprises that are active in "super-cluster" provinces and special economic zones (SEZs), so net interest income (NIM) this year will be bel

Exim Thailand’s acting president Kematat Saicheur said yesterday that under the Finance Ministry’ policy, the bank would have a greater role in trade finance and project finance for SMEs that have exposure in offshore markets and border trade, including super-cluster provinces and SEZs.

This year, Exim Thailand targets new lending to SMEs at Bt19 billion, significantly higher than the 2015 target of Bt15 billion.

For large companies, the bank projects new loans of Bt16 billion, up from the target of Bt13 billion in 2015.

It aims to acquire 300 new SME customers this year, which would bring the proportion of SME clients at the bank to 90 per cent.

Exim Thailand’s prime interest rate of 6.5 per cent per annum could be eased to encourage SMEs to use the bank’s financial services, he said.

The bank’s NIM this year is estimated to be below 3 per cent, compared with 3.05 per cent last year.

At the end of 2015, the bank’s outstanding loans that supported SMEs under the government’s strategic plan and policy had increased to Bt27.56 billion, from Bt24.77 billion in 2014.

"NIM will be lower than last year due we have relaxed as we relax interest rates to SMEs that require working capital, as we want to expand the number of SME customers in our portfolio, following to the Finance Ministry’s policy," he said.

Exim Thailand defines SMEs as those with annual sales revenue of less than Bt200 million. Clients in that category now make up 87 per cent of its customer base, and large companies with annual turnover of at least Bt200 million make up the rest. However, outstanding SME loans amount to only Bt29.18 billion of the Bt73.86-billion total. Kematat said it was not easy to expand the scale of the overall loan portfolio from SMEs because they borrow less than large companies. Still, the SME loan proportion could touch 45 per cent within four or five years. By then, Exim Thailand hopes its outstanding loans will reach Bt100 billion.

Meanwhile, the bank will go on spending money to improve core banking, so its cost-to-income ratio this year will still be high. Last year, the ratio was 27.64 per cent, up from 22.65 per cent in 2014.

"Profitability might be affected by the decline in spread, but we don’t know if the bank’s net profit will be affected much. However, if we can increase the loan portfolio, net profit might not drop," he said.

The bank reported net profit last year of Bt1.52 billion against Bt1.516 billion in 2014.

The acting president said the bank would focus more on trade-finance loans to SMEs with trade exposure in the United States and CLMV (Cambodia, Laos, Myanmar and Vietnam) because those markets this year have positive prospects.

Outstanding loans to promote investment in the Asean Economic Community last year reached Bt26.55 billion, with total lending to support investment abroad of Bt31.807 billion.

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