Financing SMEs and Entrepreneurs 2026: Thailand
Table of contents
SMEs play a significant role in Thailand’s economy. In 2024, there were approximately 3.25 million SMEs, accounting for 99.5% of all enterprises, with the majority being micro enterprises. These SMEs are primarily engaged in the wholesale, retail, and service sectors. Moreover, SMEs play a crucial role in economic growth as they are key contributors to employment, accounting for 68.81% of total employment at the end of 2024, and the country's economic growth making up around 34.98% of Thailand’s GDP in 2024.
Despite their economic significance, SMEs faced challenges in obtaining financing. Outstanding SME loans from commercial banks declined by 3.11% year-on-year to THB 3.08 trillion at the end of 2024, reflecting banks’ cautious lending amid rising credit risks and structural weaknesses due to the uneven economic recovery after COVID-19. The gross NPL ratio for SMEs improved marginally from 7.23% in 2023 to 7.17% in 2024, supported by banks’ debt assistance and better repayment capacity among some recovering groups.
SME barriers to financing are due to (i) limited competitiveness and readiness to adapt to global trends (ii) insufficient financial records for evaluating credit risk and repayment capability, such as inadequate bank statement history (iii) high credit risk and a lack of, or insufficient, collateral and (iv) the relatively small size of loan requests which do not cover the costs of credit risk assessment and monitoring by bank.
To address these constraints faced by SMEs, a range of policy measures have been introduced to (1) strengthen SMEs by providing liquidity and debt solutions, as well as (2) enhance credit access through the development of tailored financial services. On debt solution, the Thai government and the Bank of Thailand (BOT) are placing stronger emphasis on long-term debt relief to reduce burdens and enable more resilient, sustainable growth. This includes comprehensive debt restructuring programs, personalized advisory services like “Doctor Debt,” and campaigns promoting responsible borrowing and early intervention.
Moreover, in response to the rapid growth of digital finance, the BOT, in collaboration with relevant agencies, have launched a digital strategy by leveraging technology and data to improve financial inclusion. Central to this initiative are three strategic pillars, known as the "Three Opens" - Open data, Open infrastructure, and Open competition. A key innovation in the Open data pillar is the Your Data Project, which enables SMEs to securely share financial and behavioural data with lenders, improving credit assessments for those lacking traditional records. Under the Open infrastructure pillar, the BOT and the Ministry of Finance (MOF) planned to enhance credit guarantee mechanisms. Planned improvement includes enhancing credit risk assessment of borrower.
Lastly, under the Open competition pillar, in addition to earlier efforts of promoting tailored financial services such as nano-finance, pico-finance, and digital personal loans, which lay the foundation of using alternative data to assess creditworthiness for unserved groups, the introduction of virtual banks is expected to transform SME financing by enabling more agile, tech-driven financial services that extensively utilize both financial and alternative data to better meet the evolving needs of small businesses.
Source: See Table 4.
In 2024, the overall Thai economy grew by 2.50% with low inflation (0.4% due to low fuel prices and government support measures) compared to 2023. This economic growth was primarily supported by private consumption and tourism, along with government spending and a gradual recovery in technological product exports during the second half of the year. However, the growth remained uneven across sectors, highlighting persistent structural challenges. Tourism-related services continued to expand, with hotels benefiting the most due to a post-COVID-19 shift in traveler preferences toward self-guided experiences. This trend led to increased spending on accommodation and experiential activities, while restaurants and retail businesses experienced more modest gains. In contrast, several manufacturing sectors showed signs of deterioration, particularly those facing intensified competition. The automotive industry was affected by a combination of industry-specific, cyclical, and structural factors, including declining used car prices, and rising competition from imported electric vehicles. Similarly, the electronics components industry struggled with high inventory levels among partners and Thailand’s limited capacity to produce AI-related electronic products. Financial conditions remain tight in Thailand. Business loans declined in line with falling loan demand, repayment on loans borrowed during the COVID-19 pandemic, and heightened economic uncertainty. Retail loans growth slowed down overall due to slow-down private consumption and idiosyncratic factors such as in the case of auto loans. Credit quality will be closely monitored, especially for loans extended to SMEs, and low-income and highly indebted households.
Looking ahead, Thailand faces rising external risks from global trade tensions, particularly between the U.S. and China. These could disrupt supply chains and increase competition from Chinese goods in ASEAN and domestic markets. Moreover, global trade policies may further strain the financial positions of businesses and households. In response, financial institutions have adopted more cautious lending practices, further tightening credit availability. Monitoring credit risks and macro-financial linkages will be essential. Nonetheless, Thailand may benefit from investment relocation, as firms seek alternative export bases to the U.S., presenting an opportunity to strengthen its position in regional supply chains (Bank of Thailand, 2025).
In 2024, there were approximately 3.25 million SMEs in Thailand, accounting for 99.5% of all enterprises. These comprised 2 750 444 micro enterprises (84.50%), 454 829 small enterprises (13.90%), and 50 684 medium enterprises (1.60%) (see Table 2) (Office of Small and Medium Enterprise Promotion, 2024)
Based on business registration types, SMEs established in 2024 can be categorized into three groups: juristic persons (913 233 enterprises), ordinary persons and others (2 268 483 enterprises), and community enterprises (74 241 enterprises).
By firm size
Source: Thai Office of SMEs Promotion.
In terms of sectoral distribution, over 41.70% of Thai SMEs operate in wholesale and retail, followed by 40.80% in other services, 15.80% in manufacturing, and 1.70% in agriculture (see Table 3).
By sector
Source: Thai Office of SMEs Promotion.
Moreover, SMEs provided employment to 13 426 373 individuals, accounting for 68.81% of the total employment. The micro-enterprises had the highest proportion of employment, amounting to 41.01% of the total employment.
In 2024, Thai commercial banks reported outstanding SME loans amounting to THB 3.08 trillion, accounting for 30.91% of all business loans. However, SME loans experienced a slight contraction of 3.11% compared to the previous year. This decline was attributed to banks' increased caution in approving new loans, driven by rising credit risks stemming from structural issues and decreasing competitiveness.
According to the Bank of Thailand’s credit conditions report, SMEs continue to seek loans for fixed investments and working capital. However, credit standards remain tight, partly due to a slowly recovering economic outlook and declining performance in certain business sectors, alongside deteriorating loan quality (Bank of Thailand, 2024) .
SMEs in Thailand have access to a diverse range of alternative funding mechanisms tailored to their stage of development. These include crowdfunding, venture capital, private placements, and listings on the Market for Alternative Investment (MAI).
For startups and small-sized SMEs, early-stage funding options such as equity crowdfunding, venture capital, and private placements are particularly suitable.
Crowdfunding in Thailand is regulated by the Securities and Exchange Commission (SEC) and allows companies to raise capital from a broad base of investors through licensed equity crowdfunding portals. As of 2024, there are five service providers. To mitigate the high risks associated with early-stage investments, the SEC restricts participation to experienced and sophisticated investors, including institutional investors, private equity firms, venture capitalists, and angel investors. These investors typically seek high returns from a few successful ventures to offset potential losses from others (The Securities And Exchange Commission, 2024).
Private Placement for SMEs (PP-SME) is another SEC-regulated fundraising avenue. It allows SMEs and startups to issue new shares or convertible debentures to pre-selected investors without a public offering. To qualify, companies must register with the Office of Small and Medium Enterprises Promotion (OSMEP) and prepare an SME Factsheet outlining their business operations, financial status, types of securities offered, and associated risks (The Securities And Exchange Commission, 2024).
Venture Capital provides an additional funding channel, often supported by financial institutions and accompanied by tax incentives such as income tax exemptions. To foster sustainable growth among start-up firms, the BOT has revised its regulations governing venture capital investments. This revision aims to provide comprehensive support to start-ups through financial assistance, consultation, and preparation for potential exits. The updated regulations now permit venture capital to invest in a wide range of businesses with growth potential, thereby broadening the scope of investment opportunities and encouraging innovation across various sectors (Bank of Thailand, 2025).
For medium-sized enterprises seeking to scale,
The MAI offers a practical capital-raising platform with lower paid-up capital requirements than the Stock Exchange of Thailand (SET). As of October 2024, 222 companies were listed on the MAI (The Securities And Exchange Commission, 2024).
SME Public Offerings (PO-SME) enables eligible companies to offer securities to the public and list them on a newly established secondary market known as the Live Exchange. To qualify, issuers must be structured as public limited companies and are expected to receive tax benefits similar to those granted to companies listed on the SET or MAI. The SME-PO framework is based on an information-based regulatory approach, which simplifies the process by (1) eliminating the need for prior approval of the offering and (2) removing the requirement for a financial advisor. These streamlined regulations make PO-SME more accessible than traditional IPOs. However, due to the high-risk and low-liquidity nature of SME-PO securities, investment is restricted to sophisticated investors with substantial financial resources, investment experience, and a high-risk tolerance (The Securities And Exchange Commission, 2024).
As a result of the gradual economic recovery and declining performance in certain business sectors, some financial institutions have become more cautious in extending credit. This cautious approach is reflected in the financial system’s loan performance, with the gross NPL ratio remaining high at 7.17% in 2024. Although this marks a slight improvement from 7.23% in 2023, attributable to banks’ loan portfolio management, ongoing debt assistance and the reclassification of certain NPL debtors who resumed repayments under debt restructuring obligations to stage 2 loans there remains a need to closely monitor the debt serviceability of SMEs, particularly those facing slower income recovery, high debt burdens, and structural challenges that undermine competitiveness.
As aforementioned, to address these constraints facing by SMEs, it is essential to develop financial solutions tailored to the specific needs of SMEs. Inclusive financial strategies are vital for enabling SME growth and enhancing their contribution to the national economy. Recognizing their importance, the Thai government, together with the BOT and other public agencies, has prioritized expanding access to affordable and reliable financial services.
A range of policy measures have been introduced to support this goal. These measures include strengthening SMEs by providing liquidity and debt solutions, as well as enhancing credit access through the development of tailored financial services, for example:
Strengthening SME Resilience Through Liquidity and Sustainable Debt Solutions for SMEs: To ensure the long-term viability of SMEs, the government and the BOT have implemented a comprehensive strategy that combines immediate liquidity support with sustainable debt resolution measures (Bank of Thailand, 2024).
(i) Targeted Liquidity Support: To help SMEs maintain operations and preserve employment during economic downturns, these measures, delivered through Specialized Financial Institutions (SFIs), include soft loans, rehabilitation loans, and targeted financial assistance schemes tailored to specific sectors.
(ii) Sustainable Debt Resolution Measures: To support long-term financial sustainability, these initiatives include long-term debt restructuring programs, debt clinics offering structured support for defaulted retail borrowers, and “Doctor Debt,” a consultation service providing personalized debt management advice. Additionally, the “Khun Soo, Rao Chuay” campaign promotes responsible borrowing and early intervention to prevent repayment issues. A responsible lending policy has been implemented, encouraging financial institutions to assess borrowers’ long-term repayment capacity and helping to address household debt overhang.
Promoting the Development of Financial Services Tailored to SMEs: The Initiatives are key to improving access to credit for un/underserved segments, particularly self-employed and individuals without formal income documentation or those without collateral. Key solutions include:
(i) Nano-finance: launched in 2015, this program provides small‑value, unsecured loans primarily for occupational and income‑generating purposes.
(ii) Pico-finance: implemented in 2016 to offer small‑scale, multipurpose loans for personal and business purposes.
(iii) Digital personal loans: introduced in 2020, digital personal loans utilize alternative data and technology‑based credit assessment to enhance access to formal financing, particularly for borrowers without sufficient conventional credit records.
Moreover, in response to the rapid advancement of digital finance, the BOT has adopted a comprehensive digital strategy aimed at strengthening the financial sector. This strategy emphasizes the use of technology and data to bridge financial access gaps for un/underserved groups and promote greater economic inclusive growth.
Central to this initiative are three strategic pillars, referred to as the "three opens", which have significantly driven progress in the sector. These efforts have positioned Thailand as a regional leader in harnessing digital finance for inclusive growth. To support this vision, the BOT is currently implementing a range of policy measures, including project “Your Data”, the enhancing credit guarantee mechanisms, and the introduction of Virtual Banks following (Bank of Thailand, 2024);
Open Data by promoting the utilization of data for better services through Your Data Project: This initiative, which was introduced in 2024, enables users to share their data held by financial service providers or other agencies with various financial service providers via convenient and secure digital channels. This project aims to improve SMEs’ access to formal credit at reasonable costs by allowing financial service providers to assess the credit risk of customers lacking financial records, using alternative data that demonstrates their debt serviceability and good financial behavior (Bank of Thailand, 2024).
Open Infrastructure by enhancing credit guarantee mechanisms: The current credit guarantee mechanism operated by the Thai Credit Guarantee Corporation (TCG) lays a significant role in addressing the issue of SME access to finance, especially for those lacking collateral or with insufficient collateral, reflected by the outstanding guarantee amounts in TCG’s portfolio stood at THB 536 billion as of the end of 2024. To further strengthen this credit guarantee framework, the BOT and the MOF establish a plan as follows:
(i) strengthen credit guarantee mechanisms by improving risk assessment both pre- and post-guarantee period to allow guarantee fee adjustments based on changing risk profile, and by enhancing stability of funding sources from both public and private sectors; and
(ii) expand the scope of financing products eligible for credit guarantees beyond loans to bond products. This will increase opportunities for businesses to access to diverse and suitable funding options. Risk-sharing will enhance financial service providers’ willingness to lend to SMEs, especially those with insufficient or no collateral.
Open Competition by introducing new players through Virtual Banks: This initiative allows new players to operate more flexibly than traditional service providers and are able to leverage technology and data, both financial and alternative data, to create innovative financial services that better meet customer needs. Virtual banks are expected to begin providing services in 2026 (Bank of Thailand, 2024).
Notes: 1. For outstanding SMEs business loans and non-performing SMEs loans, the official definition of SMEs from Ministry of Industry has been updated as of April 2020. The new criteria are based on the number of employees and business income, replacing the previous criteria which included the number of employees and the value of total fixed assets (excluding land).
Source: See Table 2
Note: *Interbank including Central Bank, Commercial Banks, Financial Company, Credit Foncier Company, Specialized Financial banks, Savings and Credit Cooperatives, also The Federation of Savings and Credit Cooperatives, Finance and Securities Company, Life Insurances, Life Re-Insurances and Securities company.
References
1 https://www.bot.or.th/en/our-roles/monetary-policy/mpc-publication/Monetary-Policy-Report.html
2 https://www.smebigdata.com/msme/
3 https://www.bot.or.th/en/thai-economy/econ-publication/credit-conditions-report.html
4 https://www.sec.or.th/TH/Pages/LawandRegulations/Crowdfunding.aspx
5 https://www.sec.or.th/TH/pages/lawandregulations/sme-pp.aspx
6 https://www.bot.or.th/content/dam/bot/financial-innovation/sustainable-finance/green/FIPC_25680048.pdf
7https://www.sec.or.th/TH/Documents/SEC_Symposium_2024/SEC_Symposium_2024-01.pdf
8 https://www.sec.or.th/TH/Pages/LAWANDREGULATIONS/PO-SME.aspx
9 https://www.bot.or.th/en/our-roles/special-measures/covid-19.html
10 https://www.bot.or.th/en/financial-innovation/financial-landscape.html
11 https://www.bot.or.th/en/financial-innovation/digital-finance/open-data.html
12 https://www.bot.or.th/en/financial-innovation/digital-finance/virtual-bank.html
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