By THE NATION
Wirawat Panthawangkun, senior vice executive president for the strategy and analytics division of KBank, said that the bank’s strategy this year focuses on growing the retail customers and business operators on digital. It has targeted to reach Bt10 billion in loans to retail customers through the digital system and Bt20 billion to business operators.
Last year marked the beginning of the bank’s digital lending, with loan extensions on the digital side coming in at under Bt10 billion that year.
The bank had earlier tried digital lending to its customers, including those receiving a salary via the bank with most loans extended to retail customers given the constraints of its data system and its preference for customers with less risk of defaulting.
This year, KBank will expand its digital lending to more target groups, including those who do not receive a salary via the bank and business operators. This is made possible by the bank’s improved digital lending system that can screen customers, assess risks and gather sufficient information, Wirawat said. He expects to see relatively high growth in digital lending this year compared to that of last year.
“Previously, our loan portfolio through digital lending had not grown sharply, not reaching 10 per cent, compared to the loan portfolio of all retail customers. The bank’s strategy this year and in the future will focus more on growing online in every group. We have to enlarge our base to new groups of customers. Today, our IT system is ready to penetrate the customer base or extend loans online to more customer groups, not only the bank’s customers. Therefore, the bank’s future growth will start from online and digital lending,” Wirawat said.
In the first quarter of this year, KBank’s digital lending was relatively small – below Bt5 billion – and most of the loans were extended to retail customers, independent shop operators and online shops. As existing customers of the bank, it was easier to assess their risks based on their accounts there, he said.
He conceded that the bank’s digital lending remained below its target in the quarter, while rushing to push for more digital lending from the second quarter onward.
Wirawat expected digital lending to touch one-third of KBank’s target or about Bt10 billion, which could boost it to reach Bt30 billion as targeted for the whole of this year.
“Our approval for digital lending is 100 per cent as the bank has itself picked the customers and offered digital lending to them through mobile banking. Today, we’ve expanded loans [via digital] to new customers, particularly those with recurring income. We charge customers cheaper interest rates on average on the [digital] loan than on those at branches, as customers on digital carry less risk,” he said.
KBank charges an average lending rate of 10-20 per cent for loans extended through digital lending, compared to the interest rate of no more than 28 per cent levied on personal loans.