The Bank of Thailand expects its two targeted lending schemes to increase lending to small and medium-sized enterprises (SMEs) by 130 billion baht by the end of next year, as overall bank lending has begun to recover.

Speaking at the Northeastern Regional Seminar hosted by the central bank's Northeastern Office on Monday, Bank of Thailand governor Vitai Ratanakorn said total lending by the banking sector has returned to growth, driven by a 4.8% increase in loans to large corporations, while SME lending remains in contraction.

Against this backdrop, the governor expects SME lending to return to positive growth next year, supported in part by the central bank's two lending programmes: SME Credit Boost and SME Secured Plus.

Under the SME Credit Boost programme, designed to help SMEs gain better access to financing through a loan guarantee mechanism, banks have extended around 50 billion baht in loans to SMEs.

If the programme proves successful, the Bank of Thailand will propose that the government revamp the credit guarantee scheme operated by the Thai Credit Guarantee Corporation to make it more comprehensive and effective.

Meanwhile, the SME Secured Plus programme is being implemented through a relaxation of collateral requirements, allowing SMEs to use a wider range of assets to secure loans. Under the scheme, the regulator allows financial institutions to temporarily relax collateral requirements, making it easier for SMEs to access financing.

"We expect the two SME lending schemes to help increase SME lending by 130 billion baht by the end of next year," Mr Vitai said.

Mr Vitai added that the Thai economy has continued to improve despite global headwinds and domestic structural challenges. The central bank now forecasts GDP growth of 2.3% for 2026, up from its previous projection of 1.5%.

However, he said the recovery remains uneven, with a K-shaped pattern, while the Northeastern economy continues to lag behind other regions.

Household income in the Northeast remains the lowest in the country at around 100,000 baht per year, compared with the national average of around 260,000 baht. Although overall corporate lending has grown by 4.8%, lending in the Northeastern region remains in contraction, declining by around 10%.

Meanwhile, the region's non-performing loan (NPL) ratio stands at around 10% on average, significantly higher than the banking system's overall NPL ratio of about 3%, according to the central bank.

Despite these challenges, Mr Vitai said the Northeast remains a region with strong economic potential and an important contributor to Thailand's long-term growth.

The region has a large agricultural production base, a strategic location with strong links to neighbouring countries and accounts for around 22% of the country's SMEs.

"Unlocking the region's potential is essential to strengthening its economy amid ongoing challenges. Raising productivity may be difficult, but creating higher value-added products is another way to enhance the region's competitiveness and long-term growth potential," Mr Vitai said.