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Many Small Companies in Thailand Facing Bankruptcy

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Many Small Companies in Thailand

Many small and medium-sized companies in Thailand are facing bankruptcy as they struggle with falling income, rising costs and a lack of liquidity due to the impacts of the pandemic, a Chamber of Commerce survey showed on Friday.

Approximately 3 million small and medium-sized businesses power Thailand’s economy.

According to SMEs (Small and Medium-Sized Enterprises) surveyed by the University of the Thai Chamber of Commerce, the economy will grow only 1%-2% next year. SMEs contribute about 40% of the gross domestic product and 15 million jobs, according to the university.

Almost half of the respondents said they were likely to close their businesses and needed more liquidity to remain in business.

In today’s economy, it is quite obvious that SMEs are just waiting to die. The economy will slowly recover if SMEs are not supported, university president Thanavath Phonvichai said at a news conference.

The survey found that small businesses are most likely to declare bankruptcy in the service, trade, and industrial sectors.

According to Mr. Thanavath, the government should lend a hand to firms and create jobs. This will allow night businesses to flourish, which account for 20% of GDP and over 3 trillion baht annually.

In comparison to the larger enterprises, SMEs create the largest profit margins for Thailand, above all, since a large portion of the revenue is used to import machinery, technologies, and materials. Furthermore, SMEs develop wealth and prosperity in rural areas of the country.
According to a recent study by the Office of Small and Medium-Sized Enterprises Promotion (OSMEP), under the Ministry of Industry, there are 2.9 million SMEs in Thailand, representing 99 percent of all businesses.
This creates 9.7 million jobs and 3.4 trillion baht of added revenue. They contribute 37.2% to the country’s GDP and generate 1.59 trillion baht in exports.

Related News from Chiang Rai Times:

Hundreds of Thailand’s Tour Van Operators on the Brink Bankruptcy

7 Signs Filing Bankruptcy is the Right Step for Your Business

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