Kasikornbank set to start lending to smaller enterprises in China

Thailand's fourth-largest bank by asset size has already set up the lending operation with Minsheng Bank, said Joe Horn, adviser on China affairs to Kasikornbank's CEO.

He said Kasikornbank would provide half of the $100 million to be loaned to Chinese SMEs.

 The first customer will be granted a loan in July, while another customer's loan application is in the approval stage. Another four loan applications are under consideration.

The bank is focusing on customers in the automobile, auto parts and steel industries.

"The SME market in China is very big. In the first quarter this year, the outstanding loans for SMEs in Shenzhen alone were worth as much as $13.5 million," Horn said.

Horn said trade between Thailand and China was so far this year worth about $30 billion, up 27 per cent from last year. However, the investment between the countries was only between $250 million and Bt300 million per year, which is relatively low. Therefore there is great scope for Thai investors, he said.

Sawat Laisupunawong, manager of Kasikornbank's  branch in Shenzhen, said the bank had so far focused only on big customers.

The branch lent a total of $49.41 million and made a net profit of $1.12 million last year, without recording any non-performing loans.

"It is a good opportunity for Thailand as China wants Thailand to be its hub for Asean. This is also the bank's opportunity for more lending," Sawat said.

Sawat added that Kasikornbank had experience in lending to large and medium-sized customers and would extend its exposure in the SME market.