SCB sees hurdle to loan goal
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SIAM COMMERCIAL Bank has acknowledged that the goal to drive its small-business loans to one-third of total SME lending by 2020 is challenging in the face of lacklustre economic growth.
Vipon Vorasowharid, first executive vice president in charge of business banking, said yesterday that new loan bookings in the first six months of this year should approach the target of Bt50 billion, but most are still for medium-sized enterprises rather than small businesses.
Small business customers are actually still growing but at a slower pace than mid-sized customers, he said.
SCB targets new loans to small and medium-sized enterprises of Bt80 billion to Bt100 billion for this whole year.
Small businesses have a lifecycle of their own. Even though some have to shut down because of the economic slowdown, new players will emerge.
The bank wants to grow in this segment because the nature of small business is not complicated and the return is higher than for other segments.
However, this is not the right time to drive bank growth from small businesses, so the bank has attempted to adjust the structure of operations and staff to deal with this customer segment.
Another challenge for small business is the National E-payment programme. Small merchants are not familiar with having electronic data capture (EDC) terminals to accept credit and debit cards.
SCB – one of the six banks that formed a strategic partnership to expand EDCs that accept debit cards among small merchants – is educating them on the importance of having such devices.
“Small business should be in the stage of how they can leverage their business with digital technology,” Vipon said.
The bank plans to distribute about 100,000-200,000 EDC devices for debit cards to small merchants.
The cost of EDCs for debit cards is lower than for credit cards. That should make it easier to encourage those merchants to install them, he said.
SCB and the Federation of Thai Industries are holding the 13th “SCB-FTI Factory Franchise & Factory Outlet Fair” featuring some 200 Thai SMEs.
The event started yesterday and ends on Friday. The two organisers hope it will help increase domestic consumption and improve cash flow to small businesses.
