Most bor­row­ers ready to exit re­lief pro­gramme


The ma­jor­ity of bor­row­ers who ap­plied for debt re­lief mea­sures will exit the scheme be­fore it ex­pires next month, with banks pre­par­ing to ex­tend the mea­sures on a case-by-case ba­sis.

Su­rat Leelataviw­at, ex­ec­u­tive vice-pres­i­dent of Kasiko­rn­bank (KBank), said there were about 100,000 small and medium-sized en­ter­prise (SMEs) with a credit line be­low 100 mil­lion baht per cus­tomer that ap­plied for the debt re­lief mea­sures.

The bank sur­veyed 90,000 SME clients that en­tered the debt re­lief mea­sures. Some 80% are ex­pected to exit from the debt re­lief scheme af­ter it ex­pires in Oc­to­ber.

About 80% of KBank’s SME clients un­der­go­ing a debt hol­i­day have tried to pay in­ter­est in or­der to ease fi­nan­cial bur­den as much as pos­si­ble, Mr Su­rat said.

The bank will also con­tact the re­main­ing cus­tomers, roughly 6%, while about 400 SMEs, rep­re­sent­ing 0.5% of SME clients, need to close their busi­nesses.

Mr Su­rat did not elab­o­rate on the re­main­ing por­tion of SME clients.

“The debt re­struc­tur­ing sit­u­a­tion has con­tin­ued to im­prove over the past four months,” he said. “The bank is ready to pro­vide cus­tomers’ as­sis­tance af­ter the debt re­lief pro­gramme ends, in­clud­ing a debt hol­i­day mea­sure.”

For KBank’s re­tail cus­tomers that en­tered the cen­tral bank’s debt re­lief mea­sures, the to­tal is about 400,000 cus­tomers.

To­tal debt amount un­der the cen­tral bank’s debt re­lief mea­sures stood at 4.55 tril­lion baht or 31% of to­tal out­stand­ing debts in the bank­ing sec­tor worth 14 tril­lion baht as of June, ac­cord­ing to Bank of Thai­land data.

SME loans make up the largest por­tion at 49%, while 26% of SME lenders ap­plied for a debt hol­i­day, fol­lowed by re­tail loans at 36% and cor­po­rate loans at 14%.

Bangkok Bank vice-pres­i­dent Siri­dej Euan­gu­dom­sin said that about 70% of the bank’s small-sized cus­tomers who en­tered the debt re­lief scheme are able to exit af­ter Oc­to­ber.

__ The bank is ready to pro­vide as­sis­tance af­ter the debt re­lief pro­gramme ends. SU­RAT LEELATAVIW­AT


The re­main­der need to con­tinue to par­tic­i­pate in the pro­gramme, with 50% of those cus­tomers want­ing to safe­guard against risk by con­tin­u­ing to stay in the pro­gramme.

Al­though SMEs’ non-per­form­ing loans are still ris­ing amid the down­turn, the ra­tio is man­age­able un­der the bank’s debt re­struc­tur­ing pro­gramme, Mr Siri­dej said.

“The bank plans to pro­long debt hol­i­day mea­sures with a sus­pen­sion of both prin­ci­pal and in­ter­est pay­ment for an­other 6-12 months on a case-by­case ba­sis af­ter the cen­tral bank’s debt re­lief mea­sures end in Oc­to­ber,” he said.

The ex­ist­ing strong cap­i­tal base of the over­all bank­ing in­dus­try will serve as a buf­fer against higher bad debts and loan-loss pro­vi­sion, Mr Siri­dej said.

Saowa­nee Thairun­groj, pres­i­dent of the As­so­ci­a­tion of Pri­vate Higher Ed­u­ca­tion In­sti­tu­tions of Thai­land, said the Univer­sity of the Thai Cham­ber of Com­merce (UTCC), in col­lab­o­ra­tion with the Bank of Thai­land and the Na­tional Eco­nomic and So­cial Devel­op­ment Coun­cil, has pro­posed credit term reg­u­la­tion to the govern­ment to sup­port the liquidity of SMEs.

A UTCC sur­vey found that 96% of sup­ply chain busi­ness is based on credit term trans­ac­tions, with only 4% do­ing busi­ness un­der cash pay­ment.

Given the coronaviru­s im­pact, the credit term of SMEs has been pro­longed to 60-120 days and has sig­nif­i­cantly af­fected SMEs’ liquidity.

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