SMEs Incur 70 Billion Baht Damage in Recent Political Unrest

Salinee Wangtan, senior director of the BoT audit department, said the Central Bank assigned an expert team to survey information and opinions of commercial bank credit officers, who had held discussions with clients affected by the recent political mayhem.

Commercial banks have categorised affected clients into two groups: large-size entrepreneurs with many outlets and SMEs.

The major entrepreneurs suffered business sluggishness, but overall remained able to conduct business because they earned revenue from other outlets to offset shortfalls. In addition, they had capital reserves for business support and had little need to rely on funding support from commercial banks. As a result, their debt repayment prospects have not been affected.

For SMEs, their financial or liquidity support base is much smaller. Overall, while their core business remains viable, non-core business aspects are in trouble, making it necessary for them to defer the repayment of debts, particularly principal.

Damages incurred by the political unrest represented one per cent of the total loan amount of Bt7 trillion extended by commercial banks, or around Bt70 billion.
“This survey is being conducted with both SMEs and employees in the tourism or small hotel business because this group of people has not yet been paid much attention. However, commercial banks have tried to ease debt repayment conditions. The damages they had incurred represent one per cent of total loans extended in the banking system, which is considered small,” said Mrs Salinee.

She said commercial banks will closely monitor or service debtors with higher risk exposure and report to the central bank periodically, which will enable the central bank to audit commercial banks’ performance as usual.