KASIKORNBANK, in collaboration with the Organisation for Small & Medium Enterprises and Regional Innovation, Japan (OSMRJ), will provide financial and non-financial services to serve increased Japanese SME investment in Thailand and elsewhere in Asean.
The coming new investment by Japanese SMEs will also benefit Thai SMEs, in that they will be able to learn from the body of knowledge built up under the Japanese model, KBank chairman and chief executive officer Banthoon Lamsam said yesterday.
Thai SMEs should use this opportunity to develop their businesses before venturing outside their home market, he said.
In Thailand, SMEs are a key driver of lending growth in the banking system, with KBank the leader in this sector in terms of outstanding loans, he added.
The banking system reflects the state of the economy, and the government has attempted to boost the Kingdom's economy, he said, adding that if economic growth of 4 per cent can be achieved this year, then the government would have been successful in this regard.
Based on growth of 4 per cent, loan expansion in the banking industry should come in at 8-9 per cent, said the chief executive.
Japanese SMEs need to venture outside of their domestic market into areas where their business costs are lower, while KBank is geared up to serving investment in the Asean Economic Community-plus-3 era, which means Japanese policy and the bank's strategy are in correspondence, he explained.
"SMEs play a crucial role in the Japanese market, representing as many as 99 per cent of all companies in Japan and creating more than two-thirds of the nation's jobs.
"In the recent era of economic slowdown in Japan, falling domestic spending power has forced SMEs there to find new markets, and to manufacture elsewhere.
"The Japanese authorities are currently promoting SME expansion overseas, and expect more than 10,000 Japanese SMEs to make such a move within 2017," he said.
Banthoon said KBank expected 80-100 SMEs from Japan to take that step and benefit from the agreement with the OSMRJ, with more than Bt5 billion of investment.
KBank's share of the Japanese-company market here currently stands at 13 per cent, or about 3,000 companies, and this is expected to surge to 16 per cent within the next year as it becomes the foremost Thai bank in Japanese customers' minds, said the CEO.
Under the collaborative agreement with the OSMRJ, a state agency under the supervision of Japan's Ministry of Economy, Trade and Industry, both parties will give support and facilitate the provision of Thai and Asean economic and investment information to Japanese SMEs.
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