Krungsri, Thailand’s fifth-largest lender, is optimistic about achieving a 2-3% growth in small and medium-sized enterprise (SME) loans in 2024, following a surge in the first quarter of the year.
The bank’s SME loans increased by over 2% by the end of March, in line with the gradual economic recovery of the country. This follows a robust 11% growth in SME loans in 2023, bringing the total to 340 billion baht.
Despite the relatively modest target, Duangkamol Limpuangthip, the head of the SME banking group, acknowledged that the ongoing economic conditions present a challenge.
“The more conservative target of 2-3% growth this year remains a challenge because of sluggish economic conditions.”
In response to the post-pandemic economic landscape, the bank has revised its SME loan criteria. Duangkamol Limpuangthip noted that the bank continues to maintain its SME loan standards without tightening conditions, although it will selectively offer loan products to maintain asset quality.
“SMEs need to adapt their business operations, focusing on financial restructuring. Enhancing their financial structure will bolster liquidity and cash flow, fortifying their capacity for debt repayment.”
Duangkamol also stated that poor financial structures contribute to non-performing loans (NPLs) among SMEs. Krungsri is well-prepared to assist vulnerable clients with both financial and debt restructuring initiatives. The bank has set a goal to keep SME NPLs at a maximum of 2.5% of SME outstanding loans, estimated to be 350 billion baht by the end of the year.
In addition to its SME loan growth, Krungsri is also focusing on environmental, social and governance (ESG) loans. The bank plans to issue approximately 4.5 billion baht in new ESG loans to SME customers, a slight increase from the previous year’s 4 billion baht. The ESG loan products cover solar energy, electric vehicle charging stations, transformation loans, and gender equality initiatives.
Lastly, the bank is focusing on expanding its digital banking services. The Krungsri Biz Online platform, which promotes digital transactions for SMEs, saw a 40% growth in digital transactions last year, and the bank expects this positive trend to continue in 2024, reported Bangkok Post.
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