Easy Buy expects car-payment burden to slow loan growth

Chief executive officer Takeharu Uematsu said yesterday that the firm’s loan growth this year was projected at 6 per cent, down from 7 per cent in 2012.

Easy Buy has 2 million cardholders, half of whom have outstanding balances. Total outstanding loans are Bt30 billion.

While it seems certain that the first-car scheme will decrease consumers’ ability to pay debt, the extent of its effect should become clear in the second half of this year after all the vehicles are delivered to buyers.

After buyers get their new cars, they will start paying instalments, a large financial burden that could affect their ability to take on more payments for other products, he said.

The Japanese-based company forecasts that now that the first-car programme has ended, auto production will be slower in 2014 than this year, so employment in the auto industry is expected to slow down as well. Easy Buy, therefore, will more cautious about ensuring the quality of debts, adding that this implied a shift to higher-income people.

Easy Buy customers are required to earn at least Bt7,000 a month. The average monthly income of its customers is Bt13,000. Uematsu said the company planned to raise the minimum income requirement for new applicants to Bt10,000 soon. It expects the recent improvement of the national minimum wage will make it easier for Easy Buy to target higher-income people.

 

Upcountry  growth 

Easy Buy will expand its customer base upcountry, especially the Northeast and border provinces, because the economy in those locations has become stronger. Uematsu said one indicator of higher purchasing power upcountry was the expansion of retail outlets.

The firm plans to acquire 22,500 new customers this year, similar to last year. 

It will open nine new branches in the provinces this year, adding to the 87 branches it currently operates nationwide.

Customers in the provinces account for 70 per cent of the total.