SME Bank aims for 1m clients in 3 years

The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) has set an ambitious goal of increasing the number of customers to 1 million within three years.

The average credit amount for each borrower has dipped to 1 million baht from 3.2 million in the past, reflecting the bank’s greater number of small-business customers, said president Mongkol Leelatham.

He expects the average loan amount to further decline to 320,000 baht per borrower.

SME Bank has about 100,000 customers.

The bank will soon raise its capital by 8 billion baht to reach 18 billion by offering newly issued shares to the Finance Ministry to comply with a recent cabinet resolution.

Proceeds from the recapitalisation will boost SME Bank’s ability to lend an additional 200 billion baht, Mr Mongkol said.

The state-run bank has a capital adequacy ratio of 11%. Mr Mongkol said he expects the bank’s non-performing loan (NPL) ratio to fall to 14% by the end of the year and 8% by 2021 from 16% at present.

SME Bank earlier this year got approval from the State Enterprises Policy Commission (superboard) to exit its rehabilitation plan after improving its operating performance and cutting NPLs over the past three years.

SME Bank was among seven state enterprises under rehabilitation. The others are Thai Airways International, the State Railway of Thailand, the Bangkok Mass Transit Authority, TOT Plc, CAT Telecom and Islamic Bank of Thailand.