The Small and Medium Enterprise Development Bank of Thailand (SME Bank) expects to reduce its non-performing loans (NPLs) to 18 billion baht by the end of this year from 20 billion, says Somchai Harnhiran, the bank's board chairman.
The drop in NPLs is expected because of government policies raising the efficiency of Thai SMEs as well as improved cost and marketing management to increase their revenues, said Mr Somchai, who is also permanent secretary of the Industry Ministry.
Lower NPLs should allow the bank to lend more money to other SMEs this year, he said.
"SME Bank expects its loans to reach 35-36 billion baht this year. Its loan expansion plan should be in line with debt restructuring and costs control plans," said Mr Somchai.
In the first half this year, the bank's total loans stood at 16.4 billion baht lent to 5,380 SMEs, or around 3 million baht per company, he said.
The bank and the Industry Promotion Department are also cooperating to help SMEs with soft loans.
The department has project promotions that allow SMEs to ask for loans from the bank directly, facilitating small enterprises in accessing financial help, said Mr Somchai.
"Last year SME Bank lent up to 2.8 billion baht to SMEs through these promotions," he said.
The bank will prioritise lending to the automotive, bio-plastic and medical equipment sectors, said Mr Somchai, which are targeted industries in the government's Thailand 4.0 scheme meant to modernise the economy.
The 10 sectors in the scheme are: automotive and auto parts, including electric vehicles; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
The ministry plans to promote SMEs that have strong potential and produce value-added products by expanding their export channels, especially to Asean countries.
"We want to improve SME products and the firms' competitiveness, raising quality and productivity," he said.