SCB to give greater focus to loans for used cars
Siam Commercial Bank aims to be the market leader in hire-purchase (lease to own) within three to five years by stepping up its activity in the used-car market through attractive and flexible product offerings.
Having entered the hire-purchase market five years ago, SCB now has outstanding loans of Bt180 billion. Thanachart Bank is the market leader with Bt400 billion in outstanding lending.
SCB’s hire-purchase lending is growing faster than any other segment of its retail banking portfolio, followed by mortgages.
The bank is currently the market leader for mortgages, with outstanding loans of Bt400 billion. Its total retail-banking portfolio stands at Bt700 billion.
Senior executive vice president Yol Phokasub yesterday said SCB now aimed to be the leader in all segments of retail banking, and that to achieve the goal it was extending its product offerings in the used-vehicle segment.
“Most hire-purchase lenders have a 50:50 loan ratio between new and second-hand vehicles. We also hope to achieve this within three to five years, from the 70:30 ratio we have now,” he said.
As used cars represent a larger market for lenders, the bank’s products must be attractive and flexible enough to interest borrowers, he added.
Besides instalment loans for second-hand vehicles, SCB offers car-to-cash loans through its My Car My Cash product, in a scheme whereby a vehicle is used as collateral to get a non-purpose loan.
Yol said that under the bank’s customer-centric strategy, it had surveyed the requirements of car owners in regard to car-to-cash loans and found that customers want revolving credit.
SCB has, therefore, launched a new car-to-cash product called My Car My Cash Prompt, which will be officially introduced at “Money Expo 2013” from May 9-12.
The executive said that the bank would offer cash cards to used-|car customers who apply for the product.
The cards will enable them to withdraw cash and repay either the minimum or full amount they owe under the revolving credit.
The interest rate is 18 per cent per annum, lower than the 28 per cent charged for personal loans.
The maximum approved financing available under the new product is Bt2 million, and the maximum repayment term is 15 years. The normal maximum My Car My Cash repayment period is set at 60 months.
Some 5,000 to 6,000 customers are expected to sign up for My Car My Cash Prompt this year.
Boosted by the new product, SCB targets outstanding auto loans totalling Bt230 billion by year-end, Yol said.
