Bangkok--3 Jun--KASIKORNBANK
KBank offers complete assistance measures for SME customers suffering from the current economic slowdown, with an immediate lending rate cut of 3 percent and six-month grace period for principal payment, which will cost the Bank 100 million Baht. The Bank also expects to extend an additional 75 billion Baht of new loans.
As the recent political conflict has caused SME income to fall, KASIKORNBANK is assisting such businesses with a 3-percent lending rate reduction and six-month grace period for principal payment, which will cost the Bank 100 million Baht. Also, to help boost SMEs’ liquidity for their business turnaround from political and economic woes, the Bank plans to provide them 75 billion Baht of new loans.
According to Mr. Patchara Samalapa, KBank Executive Vice President, the political unrest which has dragged on since the end of last year has widely affected overall economic conditions, causing negative growth with falling investments, consumer confidence and spending. SME clients, in general, are experiencing revenue contraction by at least 40 percent, and many of them are at risk of a liquidity shortage due to a lack of working capital. Until now, KBank has offered these clients advisory services and specific financial assistance measures on a case-by-case basis.
However, due to the prolonged political instability, at least three SME segments have been severely impacted, namely those in the tourism business, building contractors, and SMEs providing agricultural products and services. Tourist numbers, both locals and foreigners, have dropped due largely to their safety concerns, while public and private investment has declined. Payments for farmers under the rice pledging program have also been delayed. KBank customers in these three categories total approximately 19,000, of which 17,000 customers need immediate assistance since their debts with the Bank are at a high proportion of their net income.
Therefore, the Bank is offering special assistance measures for these SME clients who need urgent financial aid with an immediate overdraft (OD) rate cut of 3 percent for three months, from June 1 to August 31, as well as a six-month grace period for principal payment. Moreover, an additional 75 billion Baht of new loans is now available for other SME clients that need investment budget or working capital for their operations.
The lending rate cut and grace period for principal payment are hoped to add liquidity by around 55 percent, due to a reduced debt burden, which can be used for customers’ working capital. Mr. Patchara added that given the Bank’s efficient operating cost reduction, the SME assistance measures will not affect KBank shareholders’ profits.