Ayudhya Capital adds personal instalment products

The new personal instalment products are loans for gold and jewellery, beauty and wellness, and car insurance. A personal instalment loan is one that can be paid back in monthly amounts like a car loan or mortgage, and not all at once.

Nayanee Peaugkham, executive vice president, said yesterday that even though credit cards have eaten into the shares of personal loans and cash cards, the company still aims to grow its customer base and loan portfolio with a strategy based on new personal instalment products, new innovations and new benefits.

Its targets for this year are Bt40 billion in new loans, up from Bt35 billion; Bt27.6 billion in outstanding loans, up by 5 per cent from Bt26.3 billion; and 330,000 new accounts, up from 250,000.

To cash in on rising consumer purchasing power, the company will add 3,000 dealers to its existing 7,000 partners this year.

Customers can enjoy a zero interest rate for spending on the new products except gold. The product line extensions are expected to stimulate more spending by existing customers.

Although the zero interest instalment products make up half of the company’s loan portfolio, the company will earn interest income from merchants paying interest on behalf of their customers, Nayanee said.

The company will aggressively promote its product strengths – more features and more advantages than only cash and instalment cards. The innovative features of the company’s instalment, cash, automated-teller-machine, debit and credit cards remain key selling points to attract customers.

The company issues three types of cards – two-in-one, combining cash and instalment cards; three-in-one, adding a credit card; and four-in-one, combining cash, instalment, ATM and debit cards.

The two-in-one and four-in-one cards account for 85 per cent of the portfolio, with the remaining 15 per cent from three-in-one cards.

The rises in the minimum daily wage and monthly salaries give people more discretionary income, and that will benefit card issuers. More features and more dealers will also help drive spending.

Most of the Krungsri First Choice campaigns include zero interest and are subsidised by merchant partners.

The other half of the loan portfolio is charging interest rates varying from 0.59-0.79 per cent.

For new customers who are first-jobbers, the company has developed applications on smart phones such as "click for cash" and "check billing statements".

First-jobbers are a target because they expect their first plastic cards to have more features and they need to show a minimum monthly salary of only Bt8,000 for cash and instalment cards, unlike credit cards, which require a minimum salary of Bt15,000.

Spending per holder per month averages Bt25,000-Bt35,000.