LENDING & CREDIT | Cesar Tordesillas, Thailand

Tbank to increase lending to small provincial companies

Thanachart Bank plans to accelerate loan growth in its SME portfolio from small enterprises in the provinces.

Jiratchayuth Amyongka, head of SME banking at TBank, said small enterprises would be the key drivers of its SME lending next year.

He expects growth from this segment to be at 40 percent. Meanwhile lending to medium-sized enterprises is expected to grow by 12-15 per cent and to large corporates by 5 percent.

Pre-approval for small enterprises will be cut to two days from 45, Jiratchayuth said.

He said the bank had focused more on small customers because in the SME portfolio, these are the greatest borrowers.

"These are general vendors for which housing is their only collateral, unlike medium-sized or large companies that have many

assets as collateral. The small customers always secure their collateral, so the chance of bad loans from this segment is less," he said.

Jiratchayuth said the bank hoped for Bt5 billion in new loans in the small-client segment in the remaining five months of the year.

Of the 30,000 companies in TBank's SME portfolio, 25,000 are small firms, but they account for only 19-20 percent of the loans.

Jiratchayuth said the bank targeted SME loan growth this year of 15-18 percent from outstanding loans of Bt83 billion.

To achieve the targeted lending growth from the small-client segment, TBank will aggressively pursue business in the provincial markets, because many SMEs upcountry are unable to access funds.

Customers in the provinces are expected to apply for loans of Bt1 million to Bt2 million while businesses in Bangkok seek to borrow Bt4 million to Bt5 million.

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