The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) expects its bad-loan ratio to dip below 10% this year because of its divestment plan for soured loans.
The bank plans to sell 3 billion baht worth of non-performing loans (NPLs) this quarter and a further 5 billion later this year, said president Mongkol Leelatham. SME Bank's NPLs will decline to 9 billion baht, less than 10% of loans outstanding of 100 billion, after the sales, he said.
SME Bank's NPLs amount to 17 billion baht, of which 14 billion existed before the bank underwent its business rehabilitation plan. Some 3 billion baht consists of loans that turned sour post-rehabilitation.
The bank won approval from the State Enterprises Policy Commission to exit its rehabilitation plan after it spent a few years cutting NPLs to 16 billion baht, or 16.8% of total lending as of 2017, from 32 billion or 40% in 2014.
The bank aims to lend 57.2 billion baht this year, of which 22.2 billion is earmarked for small SMEs, defined as those with annual sales of 1.8 million baht and up to five employees.
The remainder is for mid-sized SMEs.
Mr Mongkol said SME Bank plans to use mobile units to access targeted small SMEs.
The bank has 600 mobile unit teams that offer similar services to the bank's branches, including loan approvals, he said. The mobile units have approved loans worth 4 billion baht.
The aim is to increase mobile unit numbers to 1,000 by early next year. The units are located at PTT petrol stations and Thailand Post offices.
Mr Mongkol said the bank will focus on providing financial services through the mobile units, so it has no plans to add to its 95 branches across the country.
Regarding the firmer baht since the beginning of this year, he said 20,000 out of 50,000 SMEs that have international trade exposure could be hit by the local currency's run-up.
SME Bank plans to allocate 5 billion baht in bonds guaranteed by the Finance Ministry in each quarter this year to finance business expansion, he said.
The ministry has approved fresh funds worth 8 billion baht for the bank, half of which will be available this year and the other half next year.
The bank's registered capital stands at 20 billion baht, and the capital adequacy ratio is 11% of risk-weighted assets, which is above the Bank of Thailand's minimum requirement of 8.5%.
