Thai business loans expected to rise as year-end demand heats up
Banks eye Q4 rebound with rising demand from firms and consumers
Business lending in Thailand is expected to rebound in the final quarter of the year, driven by rising demand from both large corporations and small firms, according to industry analysts.
The uptick comes as the Bank of Thailand (BoT)’s latest regulations support the government’s debt relief initiative, giving financial institutions new tools to handle non-performing loans (NPLs) more effectively.
Weerapat Wonk-urai, analyst at CGS International Securities (Thailand), said large corporations are likely to increase borrowing this quarter, primarily for investment. Meanwhile, small and medium-sized enterprises (SMEs) are expected to seek more loans to support working capital needs.
“Loan demand is picking up after a quiet first three quarters.”
Weerapat said that consumer lending could also see a modest rise, especially in auto loans, thanks to end-of-year promotions and the upcoming International Motor Expo in December. However, demand for housing and credit card loans is forecast to remain steady.
Despite this short-term surge, the outlook for total sector loan growth remains cautious. CGS International estimates an overall decline of 3.3% in 2025, with modest rebounds of 1.1% in 2026 and 2% in 2027. The first nine months of this year already saw a 3% drop in lending from the end of 2024.
The BoT’s Senior Loan Officer Survey revealed that banks plan to tighten credit standards for SMEs, despite interest rate cuts since late 2024. Lenders remain wary due to the vulnerability of smaller businesses in a sluggish economy. However, asset quality among large corporations is expected to improve as funding costs decline.
The Finance Ministry’s debt relief programme, in partnership with the central bank, is seen as a positive step toward easing household debt. The plan aims to remove NPLs from banks’ balance sheets and allow struggling borrowers to clear their credit records.
Chayaporn Tocharoen, an analyst with Krungsri Securities, warned that uncertainties at home and abroad could still affect the recovery of business and household income, especially among vulnerable groups, according to Bangkok Post.
To better manage NPLs, the BoT may allow commercial banks and non-banks to collaborate with asset management firms and related legal entities. This partnership is expected to improve debt collection efficiency and provide more options for handling bad loans.
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