The Bank of Thailand is set to implement three key mechanisms aimed at unlocking credit for small and medium-sized enterprises (SMEs), with measures to be rolled out gradually from December 2026 through 2027.
The initiatives include: 1) the launch of a Credit Portal in December, which will serve as a central platform designed to address the challenge of identifying creditworthy clients, 2) a new credit guarantee mechanism funded by the Financial Institutions Development Fund (FIDF) to operate alongside the existing Small Industry Credit Guarantee Corporation (TCG), and 3) the adoption of alternative data—such as utility bills and electronic bank statements—to assess repayment capability, thereby granting traders and micro SMEs without regular income greater access to credit in accordance with their actual payment behaviour.
Under the new mechanism, the central bank aims to facilitate annual SME loan issuance of THB 100 billion to reduce the risk of non-performing loans and encourage banks to lend more assertively. Combined with TCG’s existing mechanisms, this is expected to inject a total of THB 200 billion in new loans per year into the financial system. The Bank of Thailand plans to submit these details to the Minister of Finance within three to four months, with operations expected to commence in 2027.
According to DAOL Securities (Thailand), this new round of measures is expected to give banks the confidence to extend additional SME credit and help reduce NPLs within the SME sector. This initiative builds on the earlier SME Credit Boost programme launched at the end of 2025, which provided facilities of up to THB 100 million per borrower for SMEs and up to THB 150 million for large enterprises, secured by guarantees of 15–30% depending on loan type.
In 2Q26, approximately THB 60 billion had already been disbursed under this programme, representing 70% of the total available funds. The new programme will also draw from the FIDF’s budget, although the specific funding amount has not yet been disclosed (the previous programme utilized THB 20 billion from the FIDF). Each additional THB 100 billion in new loans granted could raise total system-wide lending by approximately 1%.
Currently, the banks with the largest SME lending portfolios by market share are: Kasikornbank (KBANK) at 24%, SCB X (SCB) at 15%, Bangkok Bank (BBL) also at 15%, Krung Thai Bank (KTB) at 10%, and TMBThanachart Bank (TTB) at 7%.
DAOL maintains an ‘Overweight’ rating for the banking sector due to the end of the downtrend in interest rates, coupled with the sector’s high average dividend yield of about 6%, which exceeds the average yield of the broader equity market at 3%. Furthermore, stock valuations remain attractive, currently trading at only 0.98x price-to-book value, which is 0.25 standard deviations below the 10-year average.
The brokerage highlights KTB (target price THB 50) and KBANK (THB 270) as its top stock picks, with expectations that KBANK will benefit the most from the positive sentiment generated by these prospective measures.
As of 2:07 PM (Bangkok time) on Thursday, the share price of KTB rose by 2.31% or THB 1.00 to THB 44.25, with a trading value of THB 2.98 billion, while KBANK exhibited a gain of 0.41% or THB 1.00 to THB 245.00, with a trading value of THB 2.41 billion.
