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The rest depend on unorganised sources that charge 4.7-20 per cent in interest per month, according to a Bank of Thailand survey.

The survey report, covering 403 respondents, said 55.4 per cent of the operators used their own savings for their businesses. Only 26.2 per cent borrow from financial institutions, while the rest borrow from relatives and unorganised sources.

Half of those who use funds from unorganised sources have defaulted on payments.

Of the 4,000 SMEs in the region, those that fail to tap funds from established institutions usually have poor accounting skills and weak financial plans. Aside from accumulating huge debts, they lack clear plans for business and experiences.

The survey also said SMEs in the region lacked bargaining power when it comes to raw-material procurement. While their sales revenue has declined, they also suffer from paying more for raw materials, increased wages and being unable to secure skilled labour.

Those in the construction and restaurant businesses are expected to bear much of the brunt due to fierce competition and a more limited market.

Affecting their businesses the most are reduced purchasing power, rising rivalry and higher fuel prices, the central bank said.