BANGKOK: The number of non-performing loans among small and medium-sized enterprises (SMEs) in Thailand will show a significant increase up to next year if the current political unrest drags on into the second half of this year, predicts Benjarong Suwankiri, head of TMB Analytics at TMB Bank.

He doubts this will become a major problem, as the banks can offer measures to help their SME clients. However, the longer the political deadlock is prolonged, the more the NPL rate will rise. 

TMB Bank yesterday unveiled its SME sentiment index for the first quarter based on a survey of more than 900 enterprises. It was 37.6 points on a scale of 100 points, the lowest level since the third quarter of 2012 — and far lower than the 58.4 points TMB Analytics had predicted. 

However, the research house found that the confidence of SMEs in March showed good signs compared with the first two months because those in the eastern provinces had started enjoying export growth and brighter tourism prospects.

The index among SMEs in the eastern provinces was 50 points, and this figure is expected to edge up to more than 51 points in the current quarter on improved exports, which should help improve the overall confidence index.

SMEs in the southern provinces have the lowest confidence of any region because of low rubber prices. In the first quarter, SMEs in the agricultural and service sectors gained from export growth but in the second quarter, export growth will be driven by manufacturing.