Requests for business collateral agreements fell by 36.2% last year as financial institutions and borrowers became more cautious about granting and requesting loans due to the ongoing economic regression.
Deputy Commerce Minister Weerasak Wangsuphakijkosol said the number of requests stood at 100,461, down from 136,841 in 2019.
The total value of assets used as collateral under loan agreements fell by 13% to 1.4 from 1.7 trillion baht.
The value decreased as a result of fewer business collateral agreements.
However, if infections are controlled this year, the registration of business collateral agreements should return to normal, said Mr Weerasak.
Three types of assets with the largest loss in value under collateral agreements last year were intellectual property, with its value falling by 100% due to no registration, followed by land assets, decreasing by 99.6% to 270 million baht and valuable perennial trees, declining by 97% to 125 million baht.
Some assets, including machines, cars, ships and beasts of burden, saw their value increase by 49% to 414 billion baht from 279 billion in 2019 due to more registrations under collateral agreements.
Certain rights used as collateral, including lease rights, also saw their value increase.
This reflected some success in new regulations, which allow small and medium-sized enterprises to use their assets as collateral in order to increase access loans. Previously, borrowers could only use real estate or certain registered assets as collateral.
From July 4, 2016 to March 15, 2021, the number of requests for business collateral agreements was 588,791, with collateral worth 9.3 trillion baht in total, according to the Commerce Ministry.
Deposit accounts, valued 7.2 trillion baht, are the mostly widely used as collateral, accounting for 76.8% of all types of collateral.