Farmers queue up for help at the Samut Prakan BAAC branch. (Photo: Somchai Poomlard)
Loans from the Bank for Agriculture and Agricultural Cooperatives (BAAC) in the first quarter of its fiscal year grew at a slower pace than in the same period last year, reflecting a slowdown in economic growth, said President Tanarat Ngamwalairatt.
The BAAC’s fiscal year starts on April 1st and ends on March 31st.
From April to June 2021, the bank lent 1.16 billion baht, which is 30% less than a year earlier.
In the best case for the bank, non-performing loans (NPL) this year will grow by 4%, but in the worst case they could reach 5%.
The bank’s overdue loans as of June this year accounted for 3.86% of the total outstanding loans of 1.55 trillion baht.
BAAC expects its loans this year to exceed the 69 billion baht pledged last year, but achieving that goal is dependent on economic growth.
Some economists are forecasting a range of results, from a 1% contraction to zero growth.
According to the latest forecast of the Ministry of Finance, the average economic growth this year will be 1.3%.
Mr Tanarat said the bank is focusing on loan quality this year rather than expanding loans, in line with the impact of the epidemic on the bank’s earnings.
BAAC offered debt relief to clients by suspending principal and interest payments.
The bank granted a one-year suspension of debt repayments for clients who have to service debt on an annual basis, and a six-month suspension for those who repay the debt on a monthly basis.