Easy Buy undaunted despite household debt
DESPITE THE ECONOMIC slowdown and the high levels of household debt, the new head of Easy Buy believes it can keep growing by providing credit in accordance |with the ability of borrowers to repay.
Hitoshi Yokohama, chairman and chief executive officer, said yesterday that despite Thailand’s
current economic woes, not everyone was having financial problems.
Easy Buy caters to the mass market, which is a segment that has a high financial burden but makes up most of the population, who are key drivers of the economy.
Easy Buy provides two categories of unsecured lending, revolving loans and instalment loans.
People who have monthly incomes of Bt7,000 can apply for Easy Buy loans, but most of its customers earn Bt12,000-Bt13,000 a month.
Yokohama, who started working at Easy Buy on January 1, said the company used a scoring model to screen potential customers according to their ability to repay their debt, rejecting those with high debt-service ratios even if they have high salaries.
“The mission of Easy Buy is to
give credit to comply with the ability of borrowers [to repay], and the amount of credit must comply |with the essential [needs] of |borrowers. We have to keep to |this mission [as] this is a key of |our business success in Thailand,” he said.
Easy Buy has been in Thailand for 19 years and serviced more than 2 million customer accounts.
Before joining Easy Buy in Thailand, Yokohama was marketing director and senior adviser at Bank Nusantara Parahyangan (BNP) in Indonesia for seven years.
Acom, the parent company of Easy Buy, is a subsidiary of Mitsubishi UJF Financial Group.
MUFG holds a 40-per-cent stake in Acom, while Acom holds 71 per cent of Easy Buy. Acom also holds a 68-per-cent stake in BNP.
Easy Buy has not reported its full-year 2014 performance but as of September 30, 2014, it had total loan receivables of Bt35.76 billion, compared with Bt32.91 billion for all of 2013.
Economic cycle
Loan receivables that were overdue for more than three payment periods as of September 30 were Bt838.44 million, compared with Bt734.7 million as of December 31, 2013.
Yokohama said bad debt had been seen in the personal-loan business in line with the cycle of the economy, but customers who have delayed payment for 90 days can revert to normal status if they can resume payments after that period.
The company has a CSR (corporate social responsibility) programme to help people with their financial discipline.
It is desiged to assist low-income people with financial planning and saving.
“We believe [that] when we help them to have discipline, using credit while repaying debt on the due date will [help] low-income people know how to [make] their financial plans for the future. We are upgrading our CSR to CSV,” or “creating shared value”, he said.
