According to Mr. Akaranant Thitasirivit, KASIKORNBANK First Senior Vice President, farmers’ major harvest season is usually at year-end, when crop-trading businesses will need a large sum of working capital for agricultural product purchase and distribution at home and abroad, while seeking warehouse space for produce inventory.
KBank credit limits are now available for crop-trading SMEs, comprising term loans for warehouse construction and working capital for them to procure crops, thereby boosting their purchasing competitiveness. With the significant volume of such transactions to date, KBank has a better understanding of the business of crop-trading entrepreneurs; therefore it can provide more efficient financial support. Approximately 10-12 million Baht of daily working capital is needed for a major SME in this market segment, being used to buy agricultural products from middlemen who gather produce from retail farmers, and from the retail farmers themselves. Such activity of a large business creates income for at least 1,800 individuals in crop farming.
As of September 2014, KBank’s SME customer base in the crop-trading market totaled 4,000 operators, with 17.72 billion Baht of outstanding loans, up 14 percent over-year. Robust prospects are seen for the industry, while KBank anticipates year-end outstanding loans for the segment at 19 billion Baht, up 7 percent from the third quarter.
Mr. Akaranant added that the Bank is currently offering financial support for crop-trading business operators in many sub-segments, including retail- and medium-sized operators of tapioca businesses, exporters, animal feed factories and other types of farms. The credits are hoped to provide adequate working capital for their business operations as well as agricultural goods procurement, for better income distribution to retail farmers.