KTB, Exim Bank tailor lending in aid of SMEs

Rising baht, AEC prompt support for sectors with growth, export potential

Two state-run banks, Krungthai Bank and the Export-Import Bank of Thailand, are offering loans and attractive conditions to small and medium-sized enterprises to help them weather the currency appreciation and enhance their competitiveness ahead of the Asean Economic Community.

Prasit Wasupath, first executive vice president of listed KTB, said yesterday that the bank planned to increase its SME loans by at least 18 per cent or Bt55 billion this year from outstanding loans of Bt320 billion currently. It will focus on industries with growth potential, led by food and agriculture, energy, and auto and electronic parts, as well as on traders in border provinces.

Two programmes

For SMEs in manufacturing and services that rely intensively on labour, KTB has designed two loan programmes to support employment and boost productivity.

The bank is cooperating with the Federation of Thai Industries, the Thai Chamber of Commerce and Chulalongkorn University to assist customers in preparing for the AEC via the "Krungthai Modern Management for SMEs" programme.

Kanit Sukonthaman, president of Exim Bank, said the economy was expected to expand further this year, thanks to rising domestic demand driven by increases in both public and private investment and a rebound in the manufacturing and export sectors after the massive floods in Thailand and economic woes in the US and Europe.

Export growth is likely to be propelled by the global economic recovery and the establishment of the AEC in 2015. To mitigate further exchange risk from the strengthening of the baht, exporters can buy foreign-exchange forward contracts. To manage international trade risks, they can choose from various options including penetrating promising new markets or engaging in the full range of export credit insurance services, beginning with buyer/bank risk assessment.

Such facilities of Exim Bank will let exporters, particularly SMEs with low risk tolerance, expand with more confidence and take full advantage of export opportunities emerging in 2013.

The bank is providing export credit insurance services tailored to meet the needs of every type of export business, particularly SMEs with annual exports not exceeding Bt200 million. The lending programme is offering lower premiums, fast approvals and no claim bonus with an aim to support business start-ups or expansion.

The service protects SME exporters against non-payment risks so that they can offer more competitive payment terms to their overseas buyers. Besides, the insurance policy can be used as loan collateral.