New head out to slash NPLs at SME Bank
The new president of the Small and Medium Enterprise Development Bank (SME Bank) has made slashing non-performing loans (NPLs) his top priority.
Pongsak Chewcharat wants NPLs to be well below the current 28 per cent of the Bt43-billion total outstanding loans. He said NPLs had risen from 25 per cent of total outstanding loans just two to three years ago. However, Pongsak was hopeful that "if things go as planned, we can reduce NPLs to a level of 20 per cent of all loans". Reducing NPLs to an appropriate level was a commitment Pongsak made to the bank board when he took office on August 1. "SME Bank has a huge amount of NPLs, which have accumulated since the time it was the Small Industry Finance Corporation. After the 1997 Asian economic crisis, no commercial bank dared to lend to small- and medium-sized enterprises, except us, as we had to pilot lending according to state policy," he said. Pongsak said SME Bank would be a source of venture capital to help SMEs run their businesses. The bank was set to talk to major listed companies like PTT Plc or Siam Cement Group Plc to form venture capital to invest in selected SMEs. A second measure would be to adopt a more cautious lending approach. The bank recently revised down its lending target to Bt35 billion from Bt38 billion. In the first half of this year it disbursed Bt18 billion. Watcharapong Thongrung The Nation
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