TBank dangles refinancing for more SME clients

Refinancing is a key strategy to maintain the bank’s portfolio and add new customers within a short period, Jiratchayuth Amyongka, head of SME banking at TBank, said yesterday.
Of all new loans booked, 60 per cent are expected to be refinances, he said.
Existing customers tend to draw slowly on their credit lines, while refinance customers are concerned more about quick loan processing than interest rates.
However, the bank has to secure its existing customers to prevent them from using credit lines from other banks.
“Quick loan approvals and a tight relationship with customers are important for the bank. We will work closely with existing customers to support them with products and services that fit their requirements,” he said.
The loans to its customers that were refinanced by other banks have been reduced from Bt500 million to Bt600 million a month to between Bt60 million and Bt70 million a month, which is an acceptable rate for the bank, he said.
The bank’s credit scoring system, which provides fast loans and accurate analysis of the creditworthiness of borrowers, has been tested at 10 branches. Pre-approvals will be given in only six hours, and borrowers will get their credit line in three to five days – quicker than the seven days offered by rival banks.
In only two months of the test run at 10 branches, new loans of Bt2 billion have already been extended.
The credit scoring system will be implemented at all TBank branches on July 25.
It is part of the plan to broaden the customer base to small businesses from medium-sized enterprises.
The bank is set to build up the small-business segment of its SME portfolio, but a target for loan growth from small enterprises has not been finalised.
Still, the small-business segment should help drive loans to Bt70 billion this year from Bt59 billion last year.
“We want to capture small businesses that have good discipline |and require a credit line of no more than Bt10 million, up from loans of Bt3 million to Bt5 million provided earlier. Small businesses are growing, so their credit lines should be raised accordingly. We will also cross-sell products to this segment,” Jiratchayuth said.
The bank is also interested in microfinance, but it wants to firm up the small-business portfolio first. Microfinance is not easy because it has to rely on a strong collection system to prevent bad debt, he noted.
TBank also serves cooperatives. Loans to this segment are at Bt16 billion now and are expected to rise to Bt23 billion.