Economic Challenges, Business Adaptation, and Supply Chain Finance Today

The current economic conditions, together with the impact of COVID-19, have caused businesses worldwide—including those in Thailand—to slow down significantly. With a weakened economy, many businesses have been forced to adjust, especially SMEs, which play a vital role in driving Thailand’s economic growth. Many of these SMEs have been heavily affected due to their limited access to working capital from financial institutions or the high financing costs when borrowing from alternative sources.

Current Economic Overview

According to the Bank of Thailand’s Q2/2020 economic summary, the Thai economy experienced contraction across all business sectors. Approximately 71% of entrepreneurs were affected, and the outlook for the following 12 months suggested further decline. This applied to the service sector, trade, real estate and construction, as well as manufacturing.

The prolonged impact of COVID-19 has caused long-term disruptions, contributing significantly to the continued economic downturn.

Impact on SMEs

Even though many businesses have resumed operations, consumer purchasing power has decreased, and their spending behavior has changed due to rising financial caution. Many business sectors have seen drops in income and must navigate ongoing uncertainty.

While operations may return to normal in the future, the recovery for SMEs is expected to be slow. SMEs typically face more difficulty in obtaining loans or experience longer approval times compared to larger enterprises. Applying for working capital loans from banks often requires collateral, making access to financing even more challenging.

Supply Chain Finance: A Lifeline for Businesses in Crisis

The Bank of Thailand’s Q2/2020 Credit Conditions Survey shows increasing demand for loans across both large enterprises and SMEs. Businesses need more working capital not only to improve liquidity but also to sustain ongoing operations, support employment, and maintain production processes.

Supply Chain Finance has emerged as a key solution for SMEs, helping improve liquidity and enabling entrepreneurs to access funds more easily and quickly through Pantavanij’s services.

To expand financial access for businesses transacting within the Pantavanij system, Pantavanij’s Supply Chain Finance service acts as an intermediary between entrepreneurs and financial institutions. This simplifies the process, enhances speed and security, and ensures a reliable, seamless experience—allowing businesses to operate smoothly without interruption.

You can apply for Pantavanij’s Supply Chain Finance service here.

For more information, please visit:

– Summary of Thailand’s economic conditions, Bank of Thailand, Q2/2020
https://www.bot.or.th/Thai/MonetaryPolicy/EconomicConditions/Pages/BLP.aspx

– Credit Conditions Survey, Bank of Thailand, Q2/2020
https://www.bot.or.th/Thai/MonetaryPolicy/EconomicConditions/Pages/CreditCondition.aspx