“We can’t ask commercial banks to help SMEs as they carry risks and don’t contribute much to banks’ profits, but state-owned banks have been set up for this purpose and should be able to do more,” he said.
State-owned banks should improve their operations and work harder to support SMEs, including startups, which are an important engine for the economy, said Mr Somkid.
These state-run banks include the Small and Medium Enterprise Development Bank of Thailand (SME Bank), the Government Savings Bank (GSB) and the Export-Import Bank of Thailand (Exim Thailand).
“I’ve already discussed a major restructuring of SME Bank with the finance minister to better serve SMEs,” he said.
SME Bank needs more human resources, technology and a new management approach to access more small businesses, said Mr Somkid.
He said GSB already helps SMEs but the number remains low when compared with the bank’s overall business.
In other countries, banks that best serve SME operators are local small and mid-sized banks as they cannot compete with larger operators in extending loans to corporate clients.
“These local banks offer savings and loans to SME customers as their branch networks are expansive and they have enough staff to provide loans,” said Mr Somkid.
Both GSB and SME Bank should work together to better support SMEs nationwide, he said.
SMEs have suffered from the sluggish economy and have gained little from the country’s economic recovery and robust export growth. The government is pushing efforts to help them to bring about a broader-based economic recovery.
He said Exim Thailand should pay attention to helping SME customers expand their business into other markets instead of extending loans to exporters.
“Bank profitability should not be in their KPIs [key performance indicators]. They should instead focus on helping SMEs develop,” he said.
Mr Somkid said he has discussed creating incentives for commercial banks to assist SMEs with Bank of Thailand Governor Veerathai Santiprabhob.
The Bank of Thailand and the Thai Bankers’ Association (TBA) should create a comprehensive programme to promote better management of SMEs and new entrepreneurs.
Mr Veerathai said the central bank has been working closely with commercial banks to help SMEs.
The Bank of Thailand, in collaboration with the TBA, the government and state-owned financial institutions, recently launched foreign exchange options with lower fees for SMEs.
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