LH Bank Flags Five Warning Signs for Struggling Thai SMEs
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LH Bank Flags Five Warning Signs for Struggling Thai SMEs October 28, 2026 – Chee Ching-fu, President and CEO of Land and Houses Bank (LH Bank), disclosed at the "FAST LANE GROWTH SUMMIT 2026" that Thailand currently has approximately 3.31 million SME operators, up 54,000 from last year, generating economic value equivalent to about 35% of the country's GDP. This underscores the critical importance of SMEs to the Thai economy. At the same time, running a business is fraught with difficulties: rising costs, all-around competition, and technology and AI that have completely transformed business models, causing many entrepreneurs to question their way forward.
LH Bank reflected its perspective through the concept "Business isn't won by who is faster. It's won by who is making smarter moves." – meaning business success comes not from speed but from smart steps toward stable and sustainable development. The bank is committed to being more than a financial service provider; it aims to be a partner and ally accompanying SME entrepreneurs on every journey.
Credit Access Crisis and Challenges for Thai SMEs Tanapol Sri-thanyapong, Head of Business Research at LH Bank's Office of the CEO, presented the situation and key problems that SME operators often overlook. Commercial bank data shows SME lending has declined for 16 consecutive quarters, or about four years, since the COVID-19 crisis. Meanwhile, statistics indicate only 21% of SMEs can access commercial bank credit, compared to large firms with three times greater access. Additionally, the non-performing loan (NPL) rate for SMEs is three times higher than for large businesses.
From financial institutions' perspective, SMEs carry higher risk due to resource and manpower constraints, requiring careful loan consideration. However, banks are ready to understand and work with entrepreneurs to find practical solutions, provided entrepreneurs themselves are prepared and adapt to the rapidly changing economic landscape.
Deep Dive into "SME SOS" Warning Signs Owners Often Miss
Tanapol presented five critical warning signals – "SME SOS" – that business owners frequently overlook, affecting business stability: 1. Inappropriate money usage and debt behavior: Constantly maxing out credit lines without reserves, paying only interest, withdrawing large cash sums for unrelated purposes, and frequently applying for loans from multiple financial institutions within short periods – all reflected in credit history and raising red flags for lenders. 2. Internal management and Keyman Risk: Over-reliance on a single manager or owner (one-man show) without delegation or succession planning across generations. Statistics show only 30% of family businesses survive to the second generation; unprepared internal governance jeopardizes long-term continuity. 3. Leaky wallet and commingling of personal and business funds...
