KUALA LUMPUR (Sept 9): Thailand’s smaller businesses are grappling with a credit crunch, an online newspaper reported citing central bank governor Vitai Ratanakorn.

Loans to small- and medium-sized enterprises (SMEs) contracted for 16 consecutive quarters even as lending to large businesses turned positive in the past two-to-three quarters, The Nation said. Loan rejection rates for SMEs were 60%-70% and may be higher for some groups, the newspaper noted.

Thailand’s SME sector is facing a credit crisis, Vitai was reported as saying by The Nation.

The credit squeeze comes as Thailand’s economy struggles to regain momentum, with weak domestic consumption and sluggish exports weighing on growth.

SMEs account for seven out of every 10 jobs and roughly 35% of the country’s gross domestic product, making their access to financing a key bellwether for the broader economy. Malaysia’s biggest banks also have exposure to Thailand.

To fix the credit crunch, Bank of Thailand plans to launch a credit portal by the end of 2026 as a marketplace connecting SMEs with banks and non-bank lenders, The Nation said.

A new credit-guarantee mechanism along the lines of the Thai Credit Guarantee Corporation is also being developed, with the central bank also planning to allow use of alternative data to assess the repayment capacity of SMEs with no financial history, the newspaper added.