Taiwanese Banks report significant increase in SME Loans, exceeding Targets

Bank loans to small and medium-sized enterprises (SMEs) in Taiwan saw a substantial rise of NT$56.2 billion in November 2023, marking the third-highest surge of the year, according to data from the Financial Supervisory Commission (FSC).

Bank loans to small and medium-sized enterprises (SMEs) in Taiwan experienced a notable increase of NT$56.2 billion (approximately US$1.79 billion) in November 2023, marking the third-highest surge of the year, according to data compiled by the Financial Supervisory Commission (FSC).

As of November, the aggregated SME loans amounted to NT$9.69 trillion, constituting 65.15 per cent of all corporate loans issued by banks. The nonperforming loan ratio remained steady at 0.24 per cent, unchanged from the previous month. The annual growth in SME loans has consistently met the commission’s target for the past 16 years, except during the 2008 global financial crisis.

Notably, Taipei Fubon Commercial Bank recorded the most significant increase in SME loans over the first 11 months of the year, totalling NT$74.9 billion. The surge was primarily attributed to the bank’s merger with Jih Sun International Bank in April, allowing Taipei Fubon to incorporate NT$31.5 billion of Jih Sun’s lending into its SME loan portfolio. Other banks, including Hua Nan Commercial Bank, Chang Hwa Commercial Bank, E. Sun Commercial Bank, and Bank SinoPac, also reported substantial expansions in their SME loan books during the January-to-November period.

In a related development, Taiwan’s credit card spending witnessed a year-on-year increase of 21.66 per cent in the first 11 months of 2023, reaching a record NT$3.84 trillion. The number of credit cards in circulation in Taiwan totalled 57.96 million as of November, representing an increase of 170,000 from the previous month.

The ratio of effective cards stood at 64.94 per cent, up by 0.26 percentage points from the prior month. Total credit card spending for the entire year was projected to surpass the NT$4 trillion mark, exceeding the NT$3.49 trillion recorded in 2022.

The substantial boost in SME loans aligns with the commission’s goals and reflects the positive trajectory of lending to smaller businesses, which play a crucial role in driving economic growth.