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Published on April 25, 2008

Wichit Chaitrong

The Nation

"The GDP growth rate may be close to last year's but there are also downside risks," Thanyalak Vacharachaisurapo, head of the money and banking research department of Kasikorn Research Centre, told an SME seminar yesterday.

The slowdown of the world economy would partially reverberate on the Thai economy, she said.

The baht would strengthen about 10 per cent this whole year after it appreciated 6-7 per cent against the US dollar early this year.

That could threaten exporters, particularly those in the furniture and children's clothes businesses, due to high competition from China and Vietnam.

Investment in farm products and processed food looks promising as the prices of rice, natural rubber and tapioca are on the rise.

The tourism industry will be better this year, as arrivals are expected to rise by 8 per cent from 4 per cent last year. Hotels, tour services and restaurants are attractive for investment. However, the spa business is facing high competition.

Real estate will be boosted by the government's tax package. Auto parts and on-line trading are other interesting possibilities, he added.

Paphon Mangkhalathanaku, first vice president of the SME and micro segment management department of Kasikornbank, invited SMEs to borrow from the bank. He said the bank would offer loans worth up to 100 per cent of collateral and repayment terms up to 10 years.

Extended maturities will enable entrepreneurs to run their businesses easier because they may need a longer period before a new business breaks even.

The bank will first look into the cash flow of their business to see if they can service their debts. Then the bank will look into the value of the collateral. Borrowers would know within three days if their application was approved. Then they will have 10 days to decide to accept the loan, he said.

Fast loan approval would let SMEs act on unexpected opportunities, such as large new orders from importers, he said.

Sopana Janeborvorn, first senior vice president of the equity fund management department of Kasikorn Asset Management Co, said if SMEs have excess cash they should invest it in financial assets.

KAsset has a variety of funds for managing their investment, such as bond, stock, and combined bond and stock funds. Over the past five years its stock funds returned 238 per cent on average.