The Bank of Thailand is considering whether to extend the transformation loan facility supporting small and medium-sized enterprises (SMEs) hit by the pandemic with a view to improving their operations over the longer term.
The SME transformation loan facility under the Soft Loan Emergency Decree is scheduled to expire on April 9.
The central bank has been considering extending the loan scheme for another year, according to assistant governor Suwannee Jatsadasak.
As of Feb 13, financial institutions that participated in the loan scheme approved loans worth a total 212 billion baht to 59,891 business operators out of a total budget for the loan scheme of 250 billion baht.
The loan facility has been granted mainly to SMEs with a credit line of 3.5 million baht per client, on average.
The transformation loan's key objective is to enhance access to cheap funding for SMEs that have survived the pandemic to improve, develop and strengthen their capabilities.
The interest rate of the loan product is no higher than 5% per year for the first five years, while the average interest rate over the first two years does not exceed 2%.
"Given the economic recovery, the transformation loan programme would help support surviving businesses, particularly SMEs, to strengthen their operations in the longer term," she said.
In a related development, the central bank on Monday reported debt-to-GDP ratio of business sector covering both SMEs and large corporates stood at 87.1% in the third quarter of 2022, down from the previous quarter, for which figures were not available.
Ms Suwannee said profitability was also found to show improvement in line with the economic rebound mainly contributed by the rapidly recovering tourism sector.
Nevertheless, she said the central bank would closely monitor whether the tourism recovery continues. It would also monitor the impact of higher operating costs on the business sector.
On Monday, the central bank also reported total loan growth of the banking industry for 2022 at 2.1%, declining from a 6.5% increase the year before mainly due to debt repayment of commercial loans and government sector.
Loan portfolio restructuring and transfer of some banks also resulted in slower loan expansion last year. For this year, the industry's loan growth would be in line with the economic recovery trend, she said.
According to the Bank of Thailand, non-performing loans for 2022 stood at 2.73%, down from 2.98% the previous year.
