SME Development Bank of Thailand (SME D Bank) has extended 40.9 billion baht in loans during the first half of the year, up 12.4% year-on-year.
The uptick contrasts with the overall small and medium-sized enterprise (SME) lending portfolio of Thailand's commercial banking sector, which contracted by 2.3% over the same period.
Bank president Pichit Mitrawong said despite a challenging economic environment, including volatile energy prices, persistently high business costs, natural disasters and ongoing geopolitical conflicts, SME D Bank continued to improve SMEs' access to financing.
Most of the loans were extended to small businesses, with loan amounts of up to 15 million baht per borrower.
These loans generated 187 billion baht in economic activity and helped preserve 544,593 jobs, he said. The bank's outstanding loan portfolio totalled 101 billion baht, up 4.48% year-on-year.
Mr Pichit said while commercial banks' SME lending contracted during the first half of the year in line with the economic slowdown, SME D Bank was able to expand its lending because of its policy of providing liquidity support to SME entrepreneurs in accordance with government policy.
As of June, SME D Bank's non-performing loan (NPL) ratio was 7.56% of outstanding loans, down from 8.9% in June last year.
Of the total NPL ratio, 5.08 percentage points originated before 2015, prior to the bank's business rehabilitation programme. Since entering rehabilitation, new NPLs have increased by only 2.48 percentage points.
The bank continues to prioritise risk management by maintaining prudent loan-loss provisions against potential future risks. As a result, its NPL coverage ratio is 66.7%, reflecting the bank's strong financial position and stability, he noted.
Looking ahead to the second half of the year, Mr Pichit said SME D Bank will continue supporting SME entrepreneurs, with a focus on three strategic industries expected to drive Thailand's future economy: food, agro-processing and wellness.
These sectors align with the government's policy of promoting a greener economy and sustainable growth. The bank's strategy focuses on three dimensions.
The first effort involves improving access to finance. SME D Bank plans to help SMEs access funding through the government's public service account loan programmes, which offer a fixed interest rate of 3% per year for the first three years, repayment terms of up to 10 years, and loan amounts of up to 30 million baht. These programmes, including the SME Green Productivity Loan, SME Empowerment Loan (Pluk Palang SME) and Beyond Wing SME Loan, are designed to enhance liquidity, strengthen business capabilities and support the transition to clean energy.
The second strategy is enhancing entrepreneurial capabilities. The bank aims to provide training through both onsite and online programmes to help entrepreneurs strengthen their business capabilities, increase revenue, improve operational efficiency, reduce costs and transition towards sustainable green business practices.
The final step is supporting financially vulnerable borrowers, said Mr Pichit. SME D Bank vows to implement a three-pronged debt relief approach comprising reductions in principal, interest rates and instalment payments.
Assistance is tailored to each business's repayment capacity, helping entrepreneurs ease their financial burden, preserve employment, sustain business operations and continue growing.
