Bangkok Bank
Lending to small and medium-sized enterprises in Thailand has grown rapidly in recent years, reflecting the importance of this sector to the domestic economy. SMEs account for about 40% of GDP and employ close to 14 million of the work force.
That’s probably not a good thing in the wake of the Covid-19 pandemic. Non-performing loans were already on an upward path, according to the Bank of Thailand, reaching a nine-year high of 4.81% at the end of March, up from 4.5% 12 months earlier. Since then, numbers have almost certainly got a whole lot worse.
Some banks have coped better than others. Bangkok Bank, which is the largest bank by deposits, expects NPLs for SMEs in 2020 to be in line with the bank’s overall NPL level of 3.5%. That’s a big vote of confidence in the prudent approach towards financial management which is a hallmark of Chartsiri Sophonpanich, the bank’s president. While Bangkok Bank is better known for its impressive roster of corporate clients and its international presence, in recent times it has become a mover and shaker with smaller companies and even with startups through its InnoHub incubator programme. This provides mentoring and coaching for Thai and international startups and aims to groom the next generation of winners.
Since the start of the pandemic, Bangkok Bank has set the bar high. In conjunction with the Bank of Thailand, Bangkok Bank is rolling out soft loans to SME customers to give them much-needed liquidity. The interest rate is 2% for two years and a grace period for payments of six months.
Bangkok Bank launched the BeMerchant NextGen mobile app to SME customers to cope with the increased demand for digital payment services. The app enables merchants to receive QR Code payments via digital channels to replace cash. It also facilitates many payment types, including mobile banking and mobile applications that link with cards and e-wallets.