Siam Commercial Bank (SCB) expects to fall short of its 7% growth target for small and medium-sized enterprise (SME) loans this year.
The bank estimates that SME lending will expand by a mere 3% in 2018 after loan growth at the end of September was less than 1% from the end of last year, said Pikun Srimahunt, senior executive vice-president for the SME segment.
SCB, the country's second-largest lender by assets, now expects new SME loans of 70-80 billion baht this year, as opposed to its target of 100 billion baht.
The SME portfolio increased marginally to 348 billion baht at the end of September from 340 billion at the beginning of the year, but the bank is still maintaining its full-year SME loan growth target.
The marginal growth could be partly due to the bank's lending restructuring, in which loans by companies with annual sales above 500 million baht were transferred from the SME business unit to corporate banking.
Although Thailand's economy has recovered and momentum continues to gather pace, the effect has not trickled down to small businesses and low-income earners.
Moreover, the sharp decline in Chinese arrivals has dampened tourist growth, Mrs Pikun said, while the US-China trade dispute has also weighed on economic sentiment.
"We will focus on working capital loans for SMEs in the final quarter of the year because of positive demand in the loan segment," she said. "Several SME loan campaigns have been launched this year, and our partnership strategy will help facilitate loan expansion in the final quarter."
The bank is cooperating with the Office of Small and Medium Enterprise Promotion (Osmep) to encourage SMEs to list on the Market for Alternative Investment (MAI) as an alternative source of funding.
Suwanchai Lohawattanakul, director-general of Osmep, said 19 SMEs qualified in the office's annual contest for their potential to list on the bourse, but they must prepare further financial statements and address structural issues.
Mrs Pikun said the bank expects at least one of its SME clients to go public with a listing on the MAI next year.
Furthermore, the bank is handling three clients that plan to list on the Stock Exchange of Thailand (SET), and an additional two looking to mobilise funds through real estate investment trusts.
The three are engaged in the food/beverage, power generation and logistics sectors.
SCB shares closed yesterday on the SET at 139 baht, unchanged, in trade worth 946 million baht.