Wage hike more serious for SMEs than floods or strong baht: KBank

Kasikornbank, the market leader in SME lending, believes the impact of the rise in the daily minimum wage to Bt300 is more serious than either the strength of the baht or the severe flooding of late 2011 for small and medium-sized enterprises, as they will take longer to adjust to the increased cost.

After the floods, affected SMEs were generally able to resume their businesses quickly, while the strong baht is only negatively affecting SME exporters. The minimum-wage increase, however, will continue to impinge on business operations, KBank executive vice president Patchara Samalapa said Tuesday.

He said the bank expected SMEs to take at least two or three years to adjust fully to the nationwide wage increase, and that some non-performing loans (NPLs) from these customers could be seen in 2014.

SMEs in at least four industries - agriculture, wooden furniture, textiles and plastic - are particularly badly affected by the higher minimum, he said.

The Nation