Siam Commercial Bank (SCB) is hoping the government's economic stimulus packages will spur small and medium-sized enterprise (SME) loan demand in the second half this year after recording marginal growth in the first half as the economy sputtered.
The bank saw SME loans outstanding rise minimally to 5 billion baht for the first half this year, a gain of 1.5%, far below the 8% growth targeted this year. The SME loan portfolio amounted to 340 billion baht at the end of June, compared with the 370-billion target for year-end.
The marginal SME loan expansion in the first half is in line with the country's economic slowdown, hurt by the intensified trade tariffs between the US and China, said Pikun Srimahunt, senior executive vice-president and chief SME banking officer at SCB.
Apart from weak loan demand, there were high debt repayments to the bank, which lowered the loan growth for the period, she said.
The bank prepared around 100-120 billion baht a year for new SME loan extension.
For the first half this year, SME customers withdrew new loans worth 40 billion baht, but debt repayment was 35 billion, leaving net lending of 5 billion.
Another 70-80 billion baht is expected to be taken out in the second half.
"Despite subdued loan demand in the first half, we are leaving our SME loan growth target for the full year unchanged. Hopefully, clearer economic policies, budget disbursement and stimulus packages after the new government is installed will encourage business activities and economic momentum in the second half," said Mrs Pikun.
SCB, the country's largest lender by assets, has prepared business strategies to drive SME loan growth in the second half.
SME business training for the digital age is a key strategy to support business expansion and survival in the long run, she said. The bank has created an SME trading formula under its SCB SME Academy programme to educate and assist SMEs in the second half of the year.
The bank's numerous training programmes have helped its customers diversify both sales and risks amid the changing business landscape. The bank can screen for better quality customer groups and control non-performing SME loans, said Mrs Pikun.