Thai SMEs face rising debt and factory closures amid economic pressure

Small and medium-sized enterprises (SMEs) in Thailand are facing severe financial distress due to declining sales, rising operational costs, and tightening credit conditions. According to data from TMBThanachart Bank, SME sales have decreased by an average of 4% to 5%, while the non-performing loan (NPL) ratio for SMEs stands at 9.16%, significantly higher than the 2.85% commercial bank average.

The manufacturing sector is particularly vulnerable. In June 2026, temporary operational suspensions affected nearly 19,000 workers, a significant increase from previous months. The Bank of Thailand has identified the automotive parts, garment, rubber, and plastic industries as high-risk sectors. Challenges include the transition from internal combustion engines to electric vehicles, competition from cheap imports, and rising energy and raw material costs.

Factory closures are also on the rise, with 156 closures reported in the first quarter of 2026, marking a 11.4% year-on-year increase. While many SMEs have adopted digital technologies and AI, most report that these tools have not yet translated into increased revenue. The Thai SME Federation and other bodies are calling for urgent government intervention, including expanded financial support, low-interest loans, and debt restructuring, to prevent widespread business failures.