SME Bank eyes market vendors

The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) is targeting vendors at wet markets to boost their liquidity and encourage them to avoid loan sharks.

The bank is seeking cooperation from the owners of major wet markets in Bangkok and the provinces, said president Supot Arevart.

SME Bank has set the ceiling for loans to wet market vendors at 5 million baht each.

Major wet markets include Ying Charoen (Saphan Mai), Klong Toey and Talad Thai, each with more than 500 stalls.

Wet markets in border areas are a key focus. People in neighbouring countries have strong purchasing power because of dynamic economic growth.

The state-run bank aims to make 40 billion baht in new loans to small and medium-sized enterprises this year, well above the 9.87 billion baht in new loans offered last year.

SME Bank is one of two ailing specialised financial institutions required by the State Enterprises Policy Commission, or superboard, to rehabilitate their business in order to address long-term problems. The other is the Islamic Bank of Thailand.

SME Bank has been saddled with hefty bad loans over the past few years, due to imprudent lending.

Its bad loans stood at 31.9 billion baht or 37.61% of loans outstanding at the end of 2014.

Mr Supot said providing loans to vendors in wet markets would help them sever their reliance on loan sharks, who charge double-digit monthly interest rates.

SME Bank charges annual interest of 8.5%.

The bank is unconcerned that borrowers who are vendors in wet markets will be unable to service debt, as the cashbased nature of their business ensures high liquidity.