Director-General Yuthasak Supasorn said that the political impact could shave 1 percentage point off the growth target for SMEs, from the original target of 3.8-4.2 per cent.

The rest of the SMEs are in the trade and manufacturing sector, which are benefiting from the global economic recovery and the government's stimulus package, Yuthasak said. SME export income this year is expected to grow 15-16 per cent, from Bt1.6 trillion in 2009, which accounted for 31 per cent of national export income.

According to the office, the economic size of the SMEs, covering 2.83 million entities and 8.9 million workers, stood at Bt3.4 trillion in 2009, or 38 per cent of national GDP.

The fact that most SMEs are staying in the "safe zone" explains why all commercial banks maintain optimistic views in growing SME loans. Despite the turmoil, most banks foresee bigger growth in lending to SMEs, which at some banks are attributable to the low base last year. As most of their target clients are only slightly affected by the turmoil, they also see no point in changing the target industries.

Kasikornbank targets SME loans to expand 810 per cent to Bt392.2 billion at the end of this year. At Siam Commercial Bank, the growth rate of SME loans - which now account for about one fourth of the total loan portfolio - is expected to be 47 per cent.

While Bank of Ayudhya expects an 8-per-cent growth rate, the most active in this area could be TMB Bank and CIMB Thai Bank, both of which target a 25-per-cent growth rate. TMB aims to lend Bt20 billion this year to raise its outstanding loans to Bt100 billion. CIMB will lend Bt3 billion more to raise its SME loans to Bt15.15 billion this year. Tisco Bank, which focuses evenly on loans to car dealers and commercial vehicle buyers, sees the possibility of growth rising by 15 per cent. Notably, its SME loans accounted for only 5 per cent of the Bt120-billion loan portfolio last year.

These banks also see no change in the target industries, though some, like CIMB, put hotels on the list of target industries. Kasikorn Research Centre estimated that the turmoil could cost Bt130 billion in economic damage, and tourist arrivals should drop 8 per cent on year to 13 million. Most of the victims are those in the service sector.

"Hotels in prime destinations like Phuket are doing fine," said CIMB Thai Bank senior executive vice president Surachai Chitratsenee, chief of the SME Banking Group.

"This year, we focus more on companies that are exporting to other Asean countries and importing to cash in on the regional network of the parent company. As some in Malaysia and Indonesia are exporting to Thailand, there are some Thai companies exporting to these countries. We help capture trade between these companies. Our regional desk meets on a regular basis for this information sharing," Surachai added.

Pakorn Partanapat, executive vice president of KBank, said that the bank's target industries are in the energy sector, as companies stand to benefit from the Small Power Producer and Very Small Power Producer schemes; construction materials and construction thanks to the Thai Khemkhaeng economic stimulus package; healthcare due to the government's supports as well as growing health concern; telecom on expectation that 3G investment will be rolled out as well as fast development in the telecom industry; and agriculture, thanks to the higher prices and higher export volume.

At TMB, electronics and electrical appliances, food and beverages, automobiles and chemicals-plastic are the key target industries. Target companies are those with annual sales revenue of Bt100-Bt500 million.

"There is no change in the overall outlook, as the overall economy and exports are buoyant. Problems on loan repayment should be clearer in the next one-to-two months," Poomchai Wacharapong, BAY's head of SME Banking, concluded.