Kasikornbank (KBank) will offer new loan packages to help small and medium-sized enterprises (SMEs) hit by the higher daily minimum wage, says executive vice-president Patchara Samalapa.
It is preparing three loan packages, with a repayment grace period of six months, additional credit lines of up to 20% of existing working capital and credit lines for equipment and machinery investment. KBank is prepared to lend 10 billion baht to support the special financial programmes initially.
The assistance package is available to all existing SME clients at no more than 10 million baht each, but the bank will consider all applications case by case.
KBank, the top SME lender, found that the daily minimum wage hike to 300 baht nationwide will mainly affect labour-intensive SMEs in the farm, wooden furniture, textile and plastics sectors. In terms of location, those in the Northeast and the South are the hardest hit.Affected SMEs in these areas have seen their labour costs surge in a range of 74.4% to 80.7% and operating costs by 12-13%.
While the impact is gradual, it will hit harder than the stronger baht and the flood crisis, said Mr Patchara.
He said the wage will also affect KBank's non-performing SME loans.
However, it targets controlling bad debts in the SME segment at no more than 2.95% of total loans this year compared with 3.2% last year despite the strong loan growth.
The bank projects SME loan growth of 12.8% to 528 billion baht in outstanding loans this year.
As well, it targets total revenue from its SME business to rise by 12.6% to 35 billion baht.