According to the latest study from the University of the Thai Chamber of Commerce (UTCC), up to 40% of small and medium-sized enterprises (SMEs) face a high risk of closure due to lack of liquidity and costs of higher exploitation.
Based on the SME Status Survey from November 12 to 17, Sauwanee Thairungroj, UTCC board adviser, said that many SMEs are at high risk of closure due to the severe impact of the Covid-19 crisis. These SMEs face a severe cash shortage and cannot access funds, she said.
“The lack of liquidity is a serious problem for SMEs at the moment, while the economic situation remains very fragile,” said Ms. Sauwanee. “If a new wave of Covid-19 occurs and the lockdown measures are reinstated, the risk of a business closure only increases. “
The survey found that SMEs’ sales volume fell an average of 18.6% after the pandemic, as their operating costs rose and profits fell.
The SMEs have proposed to the government to speed up an assistance program for low-interest loans without collateral requirements, tax breaks on imports of raw materials and capital goods, tourism stimulus measures, the deployment of vaccination and effective control of Covid-19 infections.
Thanavath Phonvichai, chairman of UTCC, said the government should prioritize efforts to resolve SME liquidity problems and support the loan program worth 200-300 billion baht.
“Many SMEs face tight cash flow because they no longer have collateral available for loans,” he said. “More importantly, the aggregate purchasing power of consumers has yet to recover, while household debt remains relatively high.”
There are currently around 3 million SME operators, contributing 6 trillion baht to the country, or 40% of GDP.
According to Thanavath, if 5% of SMEs go out of business, the economic damage is estimated at 300 billion baht, affecting up to 2 million workers.
The National Council for Economic and Social Development, which is the government’s planning unit, said on Monday that household debt stood at 14.3 trillion baht in the second quarter, up 5 percent from 14.1 trillion billion from the previous quarter. This figure represents 89.3% of the GDP, against 90.6% the previous quarter.
Although the ratio of nonperforming loans (NPL) to consumer loans was 2.92%, unchanged from the previous quarter, the ratio of nonperforming loans to credit card loans accelerated for the second consecutive quarter. at 3.51%.