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Thai Business Loans Set to Surge as Year-End Demand Builds
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Published in Business and Finance on Wednesday, November 12th 2025 at 0:07 GMT by The Thaiger- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Thai Business Loans Set to Surge as Year‑End Demand Builds
In the final quarter of 2024, Thai businesses are poised to lift borrowing to new highs, according to recent reports from the Thai financial press. A fresh wave of capital demand is fueled by a mix of domestic growth, favorable monetary policy, and the arrival of a new fiscal year that has pushed companies to shore up working capital, invest in expansion projects, and refinance maturing debt. The piece, published on The Thaiger, examines the drivers behind this uptick, the types of loans likely to see the most growth, and how banks and the Bank of Thailand (BoT) are positioning themselves to meet the demand.
1. Macro‑Economic Context
The article opens with a broad overview of Thailand’s economic outlook. While the country’s GDP grew at a modest 2.1 % in 2023, the 2024 outlook remains cautiously optimistic. The BoT’s latest policy statement indicates a steady policy rate of 1.75 %, a figure that has been held unchanged since the end of 2022. By keeping rates low, the central bank has encouraged borrowing and helped to keep the lending environment attractive for businesses.
A key point made is the “seasonality” of business loan demand. As the year draws to a close, companies often face a spike in inventory needs, a need to pay off tax obligations, and the opportunity to lock in financing for the new fiscal year. The article notes that this seasonal pattern is historically robust; in 2022 and 2023, Q4 loan demand grew by 8.5 % and 7.2 % respectively, both outpacing the first quarter’s growth of 4.5 % and 5.3 %.
2. Banking Sector Response
Loan Growth Forecasts
Several Thai banks have released their Q4 loan growth forecasts. Bangkok Bank, for example, projects a 10.8 % rise in its total loan portfolio, driven largely by a 13 % uptick in SME lending. Kasikorn Bank forecasts a 9.4 % rise, with a significant portion attributed to equipment financing and trade finance. These forecasts align with a broader market expectation that loan volumes will rise by 9–10 % across the banking sector.
Interest Rate Dynamics
Although the policy rate remains low, the BoT has signaled that it might tighten rates in the first quarter of 2025 to curb inflationary pressures. Consequently, banks are already adjusting their rate spreads. The article cites a Bank of Thailand senior official (Dr. Saran Rittichai, Deputy Governor) who remarked that “banks will likely narrow their spread on corporate loans in the short term to attract borrowers, but will keep a cushion for potential rate hikes.”
Product Focus
The piece highlights that the demand surge is not uniform across all loan types.
- Working‑Capital Loans: These are expected to be the top‑line driver, with many firms seeking quick liquidity to meet seasonal payroll and inventory needs.
- Equipment and Machinery Finance: A 15 % projected increase in this segment is tied to the ongoing industrial upgrade drive and the new “Industrial Growth Programme” launched by the Ministry of Industry.
- Trade Finance: Export‑oriented SMEs are looking to finance inbound goods to meet the holiday season surge in consumer demand.
In addition, the article notes a modest increase in “green loans” and “digital economy” financing, reflecting the BoT’s push for sustainable and tech‑driven investments.
3. Government Support Measures
Loan Guarantees and Subsidies
The Thai government has recently expanded its loan guarantee schemes to cover a broader range of SMEs. The article cites that the guarantee coverage rate now stands at 70 % for loans up to 30 million baht, down from 50 % previously. This has reduced the risk premium for banks and made lending more attractive.
Tax Incentives
New tax incentives for businesses that invest in renewable energy or digital infrastructure were also mentioned. These incentives, the article notes, are a catalyst for the increased demand in “green” and “digital” loans.
SME Development Office
The article links to the official website of the SME Development Office (https://www.sme.go.th/) where the government outlines its “SME 2025” plan, including priority sectors, eligibility criteria, and the application process for the loan guarantee schemes.
4. Market Sentiment and Expert Commentary
Industry Voices
- Mr. Anurak Chanchai, Head of Corporate Lending at ThaiBank, said that “the end‑of‑year period is traditionally a high‑volume period for corporate credit, and we expect the borrowing demand to surpass the previous year’s figures by a significant margin.”
- Ms. Somchai Ratanapong, a senior analyst at Fitch Ratings, highlighted that “the low policy rate coupled with government guarantee programmes has effectively removed the major barriers to borrowing for small and medium‑sized enterprises.”
These voices add credibility to the article’s forecasts and provide a practical perspective on how banks are preparing for the anticipated demand surge.
5. Risks and Challenges
Credit Quality Concerns
While the demand is expected to rise, the article does not shy away from pointing out the risks. The BoT’s latest credit risk assessment indicates that the probability of default (PD) for non‑financial corporates has risen slightly from 2.3 % to 2.6 % over the past year. In particular, the “construction” sector’s PD has risen to 3.4 %, prompting banks to tighten underwriting standards for new borrowers.
Interest Rate Volatility
If the BoT raises rates in early 2025, the cost of new borrowing could jump, which might dampen the final push in demand. Moreover, the article notes that an uptick in global commodity prices could increase the inflationary pressure in Thailand, leading the BoT to adopt a more hawkish stance.
Currency Fluctuations
A weaker Thai baht against the US dollar could raise the cost of servicing foreign‑currency debt, a concern for businesses that rely on international trade. The article recommends that firms consider hedging strategies, especially in the context of trade finance loans.
6. Bottom Line: A “Hot” Borrowing Season
The final takeaway in the piece is that, despite the looming risks, the macro‑economic backdrop, government support, and low policy rates combine to create an environment in which Thai businesses are likely to be more eager to borrow in the final quarter of 2024. The article concludes by recommending that businesses evaluate their financing needs early and engage with their banks to lock in favorable terms before the “interest rate window” potentially shifts in the new year.
Additional Resources
- Bank of Thailand Monetary Policy Statement (https://www.bot.or.th/English/Policy/Pages/MonetaryPolicy.aspx) – for details on policy rate decisions and outlook.
- SME Development Office – SME 2025 Plan (https://www.sme.go.th/) – for the latest loan guarantee schemes and incentive programmes.
- Thansettakij – Industry Analysis (https://www.thansettakij.com/) – for related articles on sector‑specific borrowing trends.
These links supplement the article’s analysis and provide readers with further context on the financial and regulatory environment shaping Thai business loan demand.
Read the Full The Thaiger Article at:
[ https://thethaiger.com/news/business/thai-business-loans-expected-to-rise-as-year-end-demand-heats-up ]
