The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) has urged the Finance Ministry to speed up approval for the bank to double its credit limit to 30 million baht per borrower in order to boost liquidity for small business.
Even though the State Enterprises Policy Commission (superboard) has given the go-ahead, the Finance Ministry's nod is still required, said SME Bank chairwoman Salinee Wangtal.
Sixteen small and medium-sized enterprises are seeking loans of more than 15 million baht each from SME Bank, she said, adding that they applied for a combined loan amount of 350 million.
Previously, potential borrowers who asked for loans of more than 15 million baht each sought 2 billion baht in total, but the amount has declined after some operators were wiped out by the weak economy.
The economic slowdown has taken a toll on SMEs and the bank must help them get through the rough period, Mrs Salinee said.
For example, a chicken farm operator in Sa Kaeo province is waiting for a 30-million-baht loan from SME Bank to expand the business and create jobs in the province.
Mrs Salinee considers the bank's new full-year lending target of 40 billion baht as achievable, given that the bank lent nearly 3 billion baht a month on average during the four months through April and lending is expected to increase in the second half.
SME Bank made loans worth 11.1 billion baht during the January-April period.
Although non-performing loans (NPLs) rose by 145 million baht at the end of April, the bank's NPL ratio edged down to 33.4% of loans outstanding totalling 85 billion baht from 33.6% at the end of March.
The bank posted a net profit of 425 million baht during the first four months.
SME Bank has cut its minimum retail rate (MRR) and minimum factoring rate (MFR) by a quarter percentage point to 9.25% and 7.375%, respectively. The new rate came into effect on May 25.
In related news, the Finance Ministry's SME private equity trust fund is to be launched this quarter.
SME Bank injected 500 million baht into the fund.
Seventeen SMEs have asked the fund for capital, but the early stage is likely to see three or four SMEs receive less than 30 million baht each.