Krungsri First Choice banks on longer term

Krungsri Consumer, a financial consumer unit of Bank of Ayudhya, has several cards in the portfolio, resulting in overlapping markets. However, the affiliates’ business is not hurt by this overlap because each has different strengths.
“To Krungsri First Choice, we established our role by offering instalment loans with terms and conditions to suit customers’ financial burdens,” said Nayanee Peaugkham, executive vice president of Krungsri First Choice.
Holders of Krungsri or Central credit cards prefer using them cards for dining and shopping items rather than on instalments or personal loans – unlike cardholders of Krungsri First Choice, which requires a longer period of instalments, she explained.
Krungsri Consumer has a total of 6 million cards, of which 2 million – representing an outstanding loan of Bt26 billion – are Krungsri First Choice.
The reasonable period of instalment is attracting not only lower-income customers. Mid-to-upper-income earners in the range of Bt15,000 to Bt30,000 a month are also among its customers. About 80 per cent of Krungsri First Choice portfolio customers have a monthly income of Bt10,000 to Bt30,000, while 20 per cent bring home Bt8,000.
Krungsri First Choice is the only lender in Krungsri Consumer that offers loans to these Bt8,000-level income |earners.
“Those customers prefer to walk in for Krungsri First Choice services or deals rather than apply for Krungsri First Choice cards at the bank. The bank branch remains a prime channel for acquiring customers, how-ever, and about 30 per cent of new Krungsri First Choice holders come from bank contacts, |and 70 per cent from dealers,” Nayanee said.
The company concentrates more importance on increasing the number of dealer partners to lure new customers and can jointly offer attractive programmes – such as zero interest for 18 months, the longest period in the industry, she said.
The company still enjoys a margin because dealers will subsidise the financial requirements for customers because it results in higher volume.
The win-win strategy is a key success to loan growth this year, she said.
This growth shows double digits and the number of new customers in the first 11 months attracted 300,000 accounts.
Krungsri First Choice in the past recorded single-digit loan growth and acquired new customers of no more than 300,000 annually.
She said that the company was making a business plan for 2013, in which the expansion in term of dealers and cardholders remained the focus.