Although many parties share common views on a better economic outlook for Thailand and the world next year, small and medium-sized enterprises (SMEs) might still have no good reason to celebrate, said Rak Vorrakitpokatorn, president of Export-Import Bank of Thailand (Exim Bank).
Mr Rak points out that the Covid-19 pandemic has made the world change more quickly than expected. The pandemic has also created a new ecosystem in the business landscape in which SMEs that fail to adjust will find it hard to survive.
A WAKE-UP CALL
Mr Rak said that amid the pandemic online trading is now playing an increasingly crucial role.
"This phenomenon indicates that the online trading channel is now the way to survive, not an option," he said.
He said the pandemic has given a wake-up call to business operators, which awoke them from the established business environment to see the new ecosystem.
He added that the new ecosystem has brought about changes to many things. As the online trading world is expanding at a faster pace, Mr Rak wondered whether small and medium-sized shops in shopping malls would be able to adjust as more people will shop online and fewer will visit physical shopping venues.
Another possible change in the longer term is that the number of commuters going to petrol stations could decline as more and more people will use electric vehicles (EVs) which can be charged at home. This could affect the sales of small shops located in the petrol stations.
EXIM THAILAND PAVILION
With the aim of helping local SMEs to survive and thrive within the new ecosystem, Exim Bank has set up the EXIM Thailand Pavilion online trading platform for SMEs, through which they can sell their products and expand their global reach.
The bank launched this account on Alibaba.com, a world leading online trading platform. Currently over 500 Thai SMEs are trading via the EXIM Thailand Pavilion platform.
In the initial phase, Exim Bank is aiming to see 1,000 Thai entrepreneurs per year selling their products through EXIM Thailand Pavilion, and expects to see this number expand exponentially in the future.
To be qualified to join the EXIM Thailand Pavilion platform, SMEs are required to take part in Exim Bank's training courses, which will provide them with the knowledge they will need to carry out online trading -- from how to take appealing pictures of their products to inventory management. Exim Bank has also set aside a standby credit line for these SMEs once they complete the course.
Mr Rak said that EXIM Thailand Pavilion is aimed at addressing the pain point of SMEs that wish to sell products via the online channel but do not know where to begin. Exim Bank is making the process of jumping aboard the e-commerce bandwagon easier for them.
He said that out of three million SMEs registered in Thailand, fewer than 1% or less than 30,000 have operated an export business. Moreover, only 10% of Thai SMEs that sell products online carry out export business.
Rak Vorrakitpokatorn, president at Expot-Import Bank of Thailand
ANOTHER INTERPRETATION OF 'SME'
Mr Rak said that the bank provides both loans and knowledge to SMEs.
For Exim Bank, the letter S in the acronym SME means "security", which relates to Exim Bank's tools, such as export credit insurance, for exporters to be able to hedge risks.
The letter M means "money support" or its offering of easily accessible loans to entrepreneurs.
Mr Rak said that if the state financial institutions remain anxious about lending to SMEs, they would not represent the kind of institution upon which a business operator could rely. Instead, a lender should have trust in the business operator, he said.
In October 2021, the cabinet approved the "EXIM Biz Transformation Loan" scheme, offering a low interest rate of 2% per annum in the first two years and with a credit line of up to 100 million baht per entrepreneur. The loan is for business operators in order that they can improve the efficiency of their manufacturing process, including machinery and the upgrading of software.
The last letter -- E -- refers to "excellent wisdom", reflecting the bank's provision of knowledge to the business operators.
Mr Rak said that Exim Bank acts like a compass for SMEs by assisting them in exploring new promising markets and in seeking new opportunities.
He said that Thai SMEs are like small boats in the country's seas where there is a limited number of fish. They really ought to head to the vast ocean and Exim Bank is ready to be their Global Positioning System (GPS) to guide them in terms of direction and also be a life boat for small entrepreneurs.
Exim Bank does not only assist entrepreneurs planning to start export-related businesses but also those wanting to exit their existing unpromising areas of business in order to open new and improved ones overseas.
The bank can advise them as to what options they have, how they will liquidate assets or how they can use the whole or a part of their existing products or brands for the formation of the new businesses.
Mr Rak said that in these aspects, Exim Bank can step in to help them transit from their existing businesses to the new ones.
PEOPLE AND THE PLANET
Mr Rak said Exim Bank places utmost importance on people and the planet. What he means by people are the bank's staff and customers. The term "planet" reflects its green policy, focusing on lending that will help the world to become a cleaner and greener place.
Regarding economic prospects, Mr Rak said that the global economy is expected to expand by 6% this year. The US economy is expected to record economic growth of 6%, China 8%, India almost 10% and Vietnam 4%.
He said that since the country's reopening on Nov 1, the Thai economy this year could expand by 1%. In fact, growth could exceed 1% if a huge number of foreign tourists visit the country.
"The Thai economy could expand between 3.5-3.8% next year, depending on public and private investment, the recovery of domestic consumption and the number of foreign tourist arrivals," he said.
If the number of international tourist arrivals next year rebounds significantly, this would be the key factor driving the economy next year, he said.