SCB advances "Start Now" initiative, leading SMEs toward sustainable transformation

Mrs. Pikun Srimahunt, Senior Executive Vice President and Chief SME Banking Officer at SCB, noted that SMEs are grappling with volatile energy and commodity prices, as well as rising labor costs. Additionally, economic uncertainties have prompted financial institutions to tighten lending, while competition from new entrants has intensified. SCB has previously helped SMEs meet these challenges through loans, seminars, and training programs, contributing to effective loan portfolio management. By the end of Q3 2024, SCB's SME loan portfolio reached 250.893 million baht, with non-performing loan ratios showing improvement over the previous year.

The latest challenges facing Thai SMEs include the need to align their operations with sustainable business practices that address Environmental, Social, and Governance (ESG) criteria. As a significant part of the supply chain, SMEs must adapt to meet the evolving standards of larger corporations. Failure to accelerate this transition could lead to missed business opportunities and a long-term loss of competitiveness. Insights from SCB's past training activities with SMEs reveal five primary obstacles they face in adapting to ESG: 1) Lack of knowledge and understanding, 2) Concerns over potential costs of adaptation, 3) Limited capital and liquidity, 4) Business partners who may not yet prioritize ESG impacts, and 5) Limited employee awareness.

Mrs. Pikun noted that SCB's SME Banking Office has consistently supported customers' adaptation to sustainability through awareness and training initiatives, including projects like Bootcamp, IEP, DSM, IBE, The Dots, ITP, and most recently, the Phuket ESG Start Now project, training over 1,000 entrepreneurs from various industries. Additionally, SCB offers sustainable financing with lower interest rates than standard loans, enabling entrepreneurs to upgrade their environmental management, including installing solar panels, setting up EV charging stations, implementing energy-efficient equipment, converting waste into energy, and installing wastewater and pollution treatment systems. Since 2023, SCB has approved over 3 billion baht in credit for these sustainable initiatives.

With SCB's "Live Sustainably" initiative, designed to promote sustainability transition across all sectors, the SME Banking Office is committed to advancing this vision through the "Start Now" program, helping SME customers transform into sustainable, green businesses. Key details of the program include:

1. Sustainable Financing Project: Offering a special interest rate of 3.99% p.a.
2. The 4th SCB SME Sustainability Mentor Project: A consulting initiative guiding SMEs toward sustainability. SCB has partnered with three key agencies—the Office of Small and Medium Enterprises Promotion (OSMEP), the National Innovation Agency (NIA), and the Digital Economy Promotion Agency (depa)—as well as PAC Corporation Co., Ltd., a private-sector collaborator. Together, they bring a wealth of knowledge, experience, and expertise in sustainable business practices and environmental stewardship to SME entrepreneurs. This partnership aims to help SMEs develop long-term sustainability strategies and provides funding to support their transition. In cooperation with OSMEP, a special campaign has been organized to aid SME entrepreneurs. The campaign offers ESG-related business development grants, with service fee support for sustainability initiatives. Each eligible business may receive grants of up to 200,000 baht per year, with a maximum of 500,000 baht per registered entity. SCB will serve as the primary access channel for entrepreneurs applying for this support.

"Adapting to the ESG trend requires a combined approach of training, consultation, and financial support to enhance liquidity. The 'Start Now' initiative aims to raise awareness among Thai SME entrepreneurs and build their understanding of modern business practices that prioritize environmental, social, and governance (ESG) standards. SMEs that lead in this transition have a competitive edge, benefiting from low-cost financing, enhanced brand image, and the ability to attract investors and customers who value sustainable businesses. Our goal is for at least 1,000 SME customers to transition toward sustainability, with sustainability-focused loans projected to reach around 2 billion baht annually," said Mrs. Pikun.

The bank highlighted two SMEs that have successfully integrated ESG principles: NGM-X Co., Ltd., which developed the Solution Down Gauging approach to reduce plastic pellet usage in production by using high-quality raw materials, thus maintaining plastic efficiency with reduced thickness; and BCL 2002 Co., Ltd., which introduced the innovative "PERMA Nano Zinc" fiber under the PERMA brand. This technology sustainably embeds Nano Zinc within fibers to reduce bacterial buildup without coatings or heavy metals, preventing peeling during use. It is certified by the ISO 10993-5 Cytotoxicity test for medical safety, ensuring it is safe for users and environmentally friendly.

The "Start Now" press conference was organized as a Carbon Neutral Event, incorporating low-carbon practices such as using recycled or biodegradable materials, serving food in reusable containers, and encouraging public transportation. The event's carbon footprint, calculated from participants' travel based on pre-registrations, was verified by accredited institutions. SCB will also purchase carbon credits from waste-separating communities to offset the greenhouse gas emissions from the event.

SME customers can learn more about the sustainability journey and SCB's sustainable financial products at https://www.scb.co.th/th/sme-banking/total-solutions/campaign-solution/sme-go-green.html.