Bank of Thailand sets out three steps on shrinking SME credit, including alternative data

Published 28 Sep 2026Data as of 9 Sep 2026ThailandCreditSME

Correction: Stated that the rejection-rate survey method is unverified.

The BOT Governor outlined a lending portal (by year-end), a new credit guarantee (targeted for 2027) and alternative-data underwriting
SME lending has contracted for 16 consecutive quarters; the Governor cited loan rejection rates of 60–70%
The average SME borrowing rate is about 6.9% versus about 3% for large corporates

Facts

Measures: BOT Governor Vitai Ratanakorn set out three steps to address contracting SME credit: (1) a lending portal connecting SMEs with banks and non-banks by the end of 2026; (2) a proposal for a new credit guarantee scheme to the Ministry of Finance within three to four months, targeting operation in 2027; and (3) assessment of repayment capacity using alternative data for SMEs with thin financial records. Source: The Nation (2026-09-09).

Current situation: SME lending has contracted for 16 consecutive quarters (Q2 at −4.6% year on year, per a BOT official, The Nation 2026-08-19). The Governor cited loan rejection rates of 60–70% overall ¹, 78% for new firms and 86% for firms with past arrears, without disclosing the survey method or basis date (unverified). The average SME borrowing rate is about 6.9%, versus about 3% for large corporates. SMEs employ about 13.6 m people (70% of employment) and account for 35% of GDP. Source: The Nation (2026-09-09).

Analysis

Over time, SME lending has shrunk for 16 consecutive quarters (about four years), pointing to a structural retreat rather than temporary tightening. Over the same period, lending to large corporates grew 6.6% (Q2, BOT official), concentrating funds in larger borrowers. The rate gap (about 6.9% versus about 3%) shows lenders pricing SME risk high.

By comparison, Vietnam's SME credit has grown 12.4% since the start of 2026 (SBV statistics as of 28 August, presented on 19 September), and both central banks are pushing for data-driven underwriting. The contrast between contraction in Thailand and expansion in Vietnam also reflects differences in policy support such as credit guarantees and preferential rates.

Implications

ExecutivesIf alternative-data underwriting is institutionalised, lenders holding payment, tax and invoice data will find it easier to widen their addressable borrower base.

InvestorsThe credit guarantee targets operation in 2027, so it is conservative to expect limited SME credit recovery until then.

OperatorsThe value of alternative data depends on coverage, update frequency and borrower consent, so consent design for data collection should come first.

Counterpoints and uncertainties

The rejection-rate figures come from the Governor's remarks with no disclosed sample or definition, and should not be used directly to size the market. The design and funding of the credit guarantee depend on talks with the Ministry of Finance, and the 2027 start could slip. Widening underwriting with alternative data will not reduce arrears if SMEs' underlying earning power remains weak.

Figures: see definitions

SME loan rejection rate (overall): 60–70%
Unverified; survey method, population and basis date not disclosed; value = midpoint.
. Rejection rate cited by the BOT Governor. SME loan applicants. Basis date: 9 Sep 2026. Source: The Nation: Bank of Thailand sets out three steps to address SME credit crisis (2026-09-09)

Sources

Reports are for information only and are not investment advice. Methodology: sources, verification and definitions