While companies and almost all salary earners in Bangkok have hardly felt any financial difficulty from the week-long Bangkok shutdown, the rallies in seven important business areas have dealt a big blow to small and medium-sized enterprises (SMEs), which are already under pressure from the stuttering economy, say bankers.
A woman prays for good business in front of her shop near the Asok rally site on Thursday. SOMCHAI POOMLARD
Many SMEs have drawn down more from their credit lines to ease tight financial liquidity, said Jirachayuth Amyongka, the senior executive vice-president for commercial banking at CIMB Thai Bank (CIMBT).
The rallies have caused transport and business inconveniences, hurting SMEs' revenue.
Some SMEs appear to be in greater financial risks if the political stand-off becomes protracted, as their credit lines have already hit the ceiling.
"If the rally lasts another week or even a month, it will dry up SMEs' already-tight liquidity," said Mr Jirachayuth.
However, none of them has requested additional financial assistance to date.
As a pre-emptive measure, CIMBT is closely monitoring the political impact on SMEs in the affected areas on a case-by-case basis. The proactive strategy will help it to maintain asset quality and control non-performing loans.
"Apart from self-employed businesses, some small business owners have sought personal loans on top of their existing overdraft credit in order to alleviate their tight liquidity," said Thakorn Piyaphan, the managing director of Krungsri Consumer, the unsecured-loan unit under Bank of Ayudhya.
Personal loans typically charge higher interest than secured loans.
However, Krungsri Consumer's unsecured loan product business, which ranges from credit cards to personal loans, remains resilient amid the political impact, said Mr Thakorn.
Spending through its cards last year still rose from 2012 thanks mainly to a 50% increase in spending last month alone to pay for tax-saving products _ long-term equity funds, retirement mutual funds and insurance premiums.
Mr Thakorn said it remains too early to evaluate the political effect.
Krungsri Consumer expects 10% spending growth via its credit cards this year, below the industry's target of 12-13%.
Separately, Siam Commercial Bank (SCB) said the volume of its foreign exchange transactions by tourists in the capital has declined by 20-30% from a month ago, in line with falling tourist numbers in the wake of the rallies, said executive vice-president Phanporn Kongyingyong.
SCB's volume nationwide has also dropped by 5-10% despite an increase in some tourist provinces.
"The volume was significantly affected in December, normally the peak season. If the rallies are prolonged, our revenue for the segment will be affected. Therefore, we'll offset the drop with higher revenue from other areas," said Ms Phanporn.