Wednesday, February 26, 2020

SMEs stand to benefit from reduction of interest rates

Aug 16. 2019
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By The Nation

The 0.125 per cent to 0.25 per cent reduction in loan interest rates will benefit small and medium enterprises (SMEs) and boost the country’s gross domestic product by 0.1 per cent, research by Kasikorn Research Centre showed on August 15.

The study showed that the reduction of interest rates, including minimum overdraft rate (MOR) and minimum retail rate (MRR), by commercial banks will bring the interest rate cost for up to 1.7 million SMEs down by about Bt10 billion yearly.

The interest rate cuts will also bring down the cost for housing debts and personal loans in the market by up to Bt7 billion a year, which will also improve the country’s economic growth by 0.1 per cent, the study said. 

However, the interest-rate cut will impact banks’ net interest rate margin by about 0.06 per cent, the study showed.

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