Taiwan SME loan book stable, impairment ratio anchored at 1.4%

Loans supported by 2.1% domestic demand growth, Fitch says.

Reduced macroeconomic uncertainty in Taiwan is likely to support the quality of small and medium-sized enterprise (SME) loans at local banks according to a report by Fitch Ratings released on 1 March 2026.

The report noted that SMEs account for around 60% of corporate lending in Taiwan whilst also highlighting that domestic demand growth of 2.1% in 2025 has helped maintain stable SME loan performance.

Fitch said that impaired loans in the SME segment remain low at approximately 1.4% of total SME loans, and banks’ capital buffers and liquidity positions are sufficient to absorb potential stress.

The agency added that policy measures reducing economic uncertainty and stabilising trade conditions support the operating environment for SMEs.

Fitch expects that loan impairment growth will remain moderate through 2026, reflecting continued steady conditions for SME lending.