Bangkok:The recent floods in several provinces have severely impacted citizens and businesses in Thailand, particularly small and medium-sized enterprises (SMEs) that are grappling with recurring debt and liquidity issues.

According to Thai News Agency, Mr. Saengchai Teerakulvanich, Chairman of Strategy for the Thai SME Federation, highlighted the adverse effects of the floods on SMEs and proposed measures to support entrepreneurs during this crisis.

The floods have disrupted supply chains and transportation, causing stock shortages in stores and forcing temporary closures. Additionally, daily wage earners and farmers in over 20 affected provinces have suffered due to work suspensions. Businesses face high recovery costs to repair damage and secure working capital for replacing goods.

A survey by the Office of the Small and Medium Enterprise Promotion (OSMEP) in the second quarter of 2026 revealed that 45% of Thai SMEs have less than three months' worth of reserves, rendering them highly vulnerable to further flooding impacts. SMEs are categorized into three groups: continuously growing (17%), sustaining operations but lacking investment capacity (71%), and those struggling with debt and losses (12%).

Challenges in accessing formal credit further hinder SME recovery. Business debt has decreased, and loan approval rates remain below 30%. Many SMEs rely on a mix of formal and informal loans, risking permanent closure due to high debt and limited credit access.

The Thai SME Federation has recommended targeted financial relief measures, including principal and interest deferral, waived interest during moratoriums, and relaxed loan assessment criteria. Establishing a "National Disaster Insurance Fund" is also suggested to engage the insurance industry in risk management and provide comprehensive coverage to SMEs and farmers.

This crisis underscores the need for structural support measures, such as debt moratoriums and a disaster insurance fund, to sustain the SME economy and promote long-term growth.