Siam Commercial Bank (SCB), the country's second-largest lender by assets, expects to reach its 2018 loan growth target for small and medium-sized enterprises (SME) of 6-7%, though it delivered only 1% growth for the first half.
Pikun Srimahunt, senior executive vice-president and head of SCB's SME segment, said that improving loan demand from SMEs in the second half should help the bank achieve its target. SCB's financial and non-financial SME assistance measures are expected to boost demand, she said.
The bank estimates its new SME loans in the third quarter would surpass 20 billion baht, up from 19 billion in the second quarter and 13 billion in the first quarter, said Mrs Pikun.
SCB's SME outstanding loans edged up 1% from the end of last year to reach 340 billion baht at the end of June. The marginal growth could be partly attributed to the bank's lending restructurisation, by transferring loans borrowed by companies with annual sales above 500 million baht from SME business unit to corporate banking.
To achieve the target, the bank needs to book SME loan growth of 3.5% per quarter in the second half of 2018, she said.
Despite the positive signs, debt repayment could be a drag, said Mrs Pikun.
She said the bank, under its "Going Upside Down" policy, is encouraging SME customers to go digital in order to survive in the digital era.
"Around 10,000 SMEs are using digital platforms, and their sales are improving. With a collaborative partnership model with the government and private sector, we can offer attractive interest rates for SMEs," said Mrs Pikun.
SCB is cooperating with Department of Industrial Promotion to boost sustainable community enterprises. In the initial stage, the bank will prepare 20 billion baht in credit lines to attract SMEs, with interest rates starting from 5% per year.
At the end of June, SCB managed to keep a lid on SME non-performing loans (NPL) at around 28 billion baht.
However, the NPL ratio jumped to 8.25% of its outstanding loans from 6-7% at the end of 2017 because of loan restructuring, she said.
