SME BANK seeks to cut risk of NPLS

SME Bank president Pongsak Chewcharat said the institute had tried the BCD system on more than 1,500 business operators to analyse their weak and strong points. It will inform the operators of its diagnoses within a month.

Now, the bank and the institute will join forces to apply the diagnostic system to small and medium-sized manufacturers in the food, textiles and garments, electric and electronic, auto-parts, metal parts and packaging industries. "We are confident the project will boost operators' business competitiveness, while we expect to be able to approve loans for them more rapidly," Pongsak said.

The SME Bank is aiming to reduce its non-performing loans (NPLs) from 50 per cent of total loans to a level lower than 40 per cent this year. However, the target is a difficult one because of negative economic factors, particularly skyrocketing oil prices, he said.

"We will try to hold our NPLs at 40 per cent this year, but we are worried about new NPLs because our customers cannot raise their product prices, while their production costs are higher," he said.

The SME Bank has fallen short of its loans target by 20 per cent so far this year. Pongsak declined to reveal the figures. To promote SME products and community-produced goods, the bank is exploring new markets for them in places such as Laos, Vietnam, Burma and Cambodia.

In order to increase their distribution channels, it is also continuing to arrange "business matches" between Thai SMEs and companies in Japan and China that have high purchasing power.