Interest-free SME loans from KBank

MAY 6, 2020

Kasikornbank (KBank) has launched a 1-billion-baht loan scheme, offering interest-free borrowing for the first year to small and medium-sized enterprises (SMEs) with up to 200 employees as a way to keep 41,000 workers on payroll during the pandemic.

The bank will also provide a monthly grant of 8,000 baht for three months to SME employees taking part in the scheme, said chairman emeritus Banthoon Lamsam.

The loans are designated to maintain SME workforces. The scheme waives all fees, requires no collateral and offers a debt moratorium for one year.

The offer is available only to the bank’s existing customers. The loan amount is determined by the number of workers.

KBank expects about 1,000 SME operators to take advantage of the loans, saving 41,000 employees, Mr Banthoon said.

With the 8,000-baht grant and zero-rate loans for the first year, the bank hopes that small SMEs will have money to keep employees, allowing them to survive amid the hardship, he said.

In mid-April, KBank, the country’s largest lender by assets and biggest player in the SME loan business, unveiled a low-rate loan scheme requiring SMEs to contribute the same amount as saved interest expense and use the matching amount to pay employees’ wages.

The pilot loan scheme, available in Phuket province, has retained 2,000 employees or almost 70% of the targeted 3,000 staff. In addition, the bank’s loan scheme has helped borrowers save interest expense of up to 60 million baht.

“The various financial assistance programmes will lead to higher non-performing loans (NPLs), and the bank needs to set aside additional loan-loss reserves,” Mr Banthoon said. “This is acceptable. We’re in a war, so we need to think in new ways because the existing solutions would be unusable. This is a sustainable measure that will provide benefits in the longer term, even though we’re feeling the pain now.

“The banking sector, including KBank, may earn no profits this year, but this is acceptable and will not affect the industry much, given the strong capital base.”

The Kasikornbank Foundation is providing a 4,000-baht monthly allowance for three months through July to 5,083 healthcare professionals caring for virus-infected patients in 45 state hospitals in the five southernmost provinces (Songkhla, Satun, Yala, Pattani and Narathiwat).

The stipend for medical workers in the five provinces is part of the foundation’s 300 million baht in grants to 20,000 medical staff nationwide.

The money will be transferred directly to recipients.

“Doctors and medical staff are on the front line, exposed to risk and working hard amid the outbreak,” Mr Banthoon said.

Source : The Bangkok Post