Amid a liquidity crunch, Government Savings Bank (GSB) aims to accelerate lending in the second half of the year to achieve loan growth of 3-4% for 2026.
Loan growth
Songpol Chevapanyaroj, president and chief executive of GSB, said the bank recorded loan growth of around 3% in the first half of the year, with the positive momentum expected to continue in the second half.
The state-owned bank typically targets loan growth of twice GDP growth, or around 3-4% this year, according to Mr Songpol, who has served as chief executive for about five months.
To support this target, GSB is preparing to roll out a new "Loan on Demand" facility that allows businesses to adjust their credit lines according to their actual funding needs. The product is designed to offer greater flexibility by enabling customers to borrow only what they need, rather than maintaining a fixed credit facility throughout the year.
"Given the slower growth of the Thai economy and the banking system's credit crunch, businesses increasingly need working capital. Our Loan on Demand model will improve access to liquidity while helping businesses reduce financing costs," he said.
For example, hotels typically require significantly more working capital during the tourism high season. Under GSB's model, borrowers can draw down funds only when needed, in contrast to the conventional model where businesses often borrow more than they immediately require and continue paying interest on unused funds, said Mr Songpol.
The bank will also continue expanding lending for energy transition projects, including electric vehicles and rooftop solar installations.
In addition, GSB will provide financial assistance to businesses and individuals affected by the escalating conflict in the Middle East and rising oil prices, he noted.
The bank's soft loan programmes, including a 100-billion-baht facility and another 100-billion financing package for small and medium-sized enterprises, are expected to support loan growth this year. The bank has already extended 34 billion baht from the first 100-billion-baht facility.
Improving asset quality
Alongside its loan growth target, GSB aims to reduce its non-performing loan ratio to below the current level of around 3.5%, against a total loan portfolio of 2.4 trillion baht. The improvement in asset quality will be driven by stronger risk management and better repayment discipline among borrowers, said Mr Songpol.
To encourage responsible borrowing, he said GSB introduced automatic interest rate reductions for customers with strong repayment records through its MyMo mobile app. The programme initially covers mortgage and teacher loans and is expected to be expanded to other lending products.
GSB markets itself as a financial partner for underserved individuals and small businesses with limited access to commercial bank financing. Beyond promoting financial inclusion, helping customers improve their financial health is one of the bank's key mandates.
GSB must remain financially strong enough to fulfil its policy mission.
Mr Songpol said the bank has clearly defined its role as supporting Thais at every stage of life, particularly those at the grassroots level. Amid a challenging economic environment and ongoing liquidity constraints, GSB aims to ease the financial burden on indebted borrowers.
"However, we are not a charity. We need to remain profitable and financially strong so that we can continue bridging the gap for those who are excluded from the traditional financial system," he said.
