The state-owned Small and Medium Enterprise Development Bank (SME Bank) has restructured 13 billion baht worth of debt owed by almost 10,000 small business operators during the first 10 months of this year.
Mongkol: Bracing against difficulties
The debt restructuring is aimed at helping SME operators ride through the difficult period, president Mongkol Leelatham said.
More banks are seeing an uptick in non-performing loans (NPLs), due largely to the country's economic slowdown.
Among borrowers, SMEs and farmers are the biggest contributors to the rising bad loans.
The Bank of Thailand recently said bad loans are expected to continue rising next year as some sectors fail to benefit from the expected economic recovery.
Commercial banks' gross NPLs rose to 2.89% of loans outstanding at the end of September from 2.72% recorded at the end of June and 2.64% at the end of March, according to central bank data.
The gross NPL ratio at the end of September was close to the recent high of 2.95% recorded at the end of June 2011.
The outstanding value of distressed loans was 394 billion baht at the end of September, up from 374 billion in the preceding three months.
Mr Mongkol said the state-run bank has never ignored its customers' financial hardship, but acknowledged that SME operators would face a financial crunch at some point.
The bank's debtors who are facing financial difficulties can request debt restructuring by rescheduling and lowering the due amount in each instalment to alleviate their financial burden, he said.
They can also ask the SME Bank for other forms of assistance, such as marketing, management, financial and tax advice, modernising designs or packaging, adding value to products and broadening distribution channels through Alibaba.com, he said.
Mr Mongkol said the bank has tried to avoid using legal channels to deal with SME operators' defaulted repayments, seeking other ways to solve the problem.