TTB Points Out Thai SMEs Trapped in 'Survival Mode' – Unable to Grow Despite Economic Headwinds and Chinese Product Surge; Bank Eyes Double-Digit Lending Expansion

Thai Military Bank (TTB) released its SME Insight 2026 survey showing Thai entrepreneurs facing mounting pressures from sluggish economic growth, high household debt, rising business costs, and intense competition from Chinese imports. Most SMEs remain stuck in "survival thinking" rather than growth planning, even as they begin adopting digital tools and AI. TTB is meanwhile pushing ahead with double-digit expansion of new SME lending after seeing signs the market has bottomed out, while maintaining strict control over non-performing loans at no more than 5%.

Pirpong Nitikraivut, head of TTB's business customer strategy group, revealed that while SMEs account for over 90% of all Thai businesses and employ more than 70% of the workforce—approximately 13.6 million people—they contribute only about one-third of the country's GDP. This reflects declining competitiveness among Thai SMEs compared to developed economies like South Korea, where SMEs generate 45-50% of GDP. Thailand's SME contribution has fallen from nearly 40% historically to just one-third today.

"SMEs are the backbone of Thailand's economy, but today they're stuck in place while the world moves forward," Pirpong said. "Their competitiveness is declining as a result."

Key pressures stem from Thailand's sluggish 2-3% annual economic growth, far below regional peers, while household debt remains near 90% of GDP, weakening domestic purchasing power. Thai entrepreneurs also face fierce competition from surging Chinese imports flooding the region as China's exports to the US slump. Geopolitical factors and trade tensions meanwhile continue pushing up operating costs for energy, transportation, raw materials, and online platform fees.

"Many entrepreneurs consistently report that rising costs are the biggest pressure. Some businesses barely make any profit but must maintain sales just to keep operating," Pirpong said.

The SME Insight 2026 survey of over 120 entrepreneurs across Bangkok and the provinces, covering businesses with annual revenues of 50-400 million baht, identified the first critical bottleneck: "Thinking to survive, not to win." Many entrepreneurs focus on short-term problem-solving rather than building competitive advantages or long-term planning. The survey found 33% of SMEs have virtually no long-term business plan or only year-to-year planning, while 27% say their primary goal is simply keeping the business running and meeting payroll. "Those focused only on survival saw revenue drops exceeding 30%, with some declining nearly 50%," Pirpong noted.

The second bottleneck is "Using digital tools but not transforming the business." While 87% of Thai SMEs have adopted digital systems for management and nearly 60% have begun applying AI, most use them at basic levels—payment systems, translation, or report summaries. Meanwhile, over 58% of businesses saw flat or declining revenues. Pirpong stressed that maximizing technology benefits requires integrating financial data, accounting, sales, personnel, and customer information for strategic analysis and management.

The third bottleneck involves "Knowing profit and loss but not managing risk." While 90% of SMEs now use accounting systems and better understand costs, they lack analysis of cash flow, credit, and volatile cost risks. A fourth bottleneck related to growth capacity was also identified in the survey.