The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) aims to offer as much as 90% of new loans next year to micro SMEs.
The bank plans to offer 32 billion baht in new loans to micro SMEs out of its full-year target of 35 billion baht, said president Mongkol Leelatham.
Based on the bank's ceiling for micro SMEs of 600,000 baht each, the bank expected to offer loans to 50,000 operators, Mr Mongkol said.
He said micro SMEs are the bank's main target because the group has difficulty accessing formal financial sources, takes minimal advantage of state policies and adapts to change at the slowest pace.
Nearly all of the bank's 26 billion baht in loans during the January-to-September period were extended to micro SMEs, Mr Mongkol said, adding that SME Bank's new loans will surpass this year's target of 32.5 billion baht by 4 billion.
Loans of almost 6 billion baht have already been approved and are waiting borrowers to take the funds, while a further 4 billion baht worth of loans are undergoing the bank's approval process.
According to the Office of Small and Medium Enterprise Promotion, micro SMEs are defined as small businesses with annual sales of up to 1.8 million baht and up to five employees. About 3 million micro SMEs exist nationwide.
To improve access to micro SMEs, the bank will increase mobile lending teams to 1,000 from 600 to offer loans in every subdistrict nationwide and promote lending through the banks' mobile banking app.
So far about 70,000 users have visited the bank's digital lending service and some have applied for loans through the channel, Mr Mongkol said.
He said a mere 0.04% of the bank's new loans in the nine months through September turned sour, down from 0.21% in 2017.
The bank plans to lower non-performing loans (NPLs) to 15 billion baht, representing 15% of loans outstanding, by the end of this year. The goal is to cut NPLs to less than 10% by next March as the bank divests of 12 billion baht worth of bad assets.
The debt targeted for unloading can no longer be restructured after having gone through the process several times, in some cases as many as 28 times.
Of the total 12 billion baht, 3 billion is expected to be put on sale by the Legal Execution Department in January as the latest.
In other news, SME Bank plans to raise 21 billion baht by issuing bonds with a three-year maturity to lower financial costs.
The bank's deposits average 1.47%, while lending stands at 5.1%, leaving the margin at 3.63%, which is in line with the target to keep an interest spread of 3.67% at most.