By ERICH PARPART
TWO private financial institutions are expected to offer nano-finance services before the end of this month, while two more plan to offer it later, one in May and one in July.
The Finance Ministry officially provided nano-finance permits to four non-bank institutions yesterday. The Bank of Thailand will monitor the scheme.
Nano-finance is a loan that can be extended to an individual seeking to borrow up to Bt100,000 without collateral to use for business operations. Firms wishing to get into the nano-finance business need to show a minimum of Bt50 million in registered capital.
The effective cost of the loan, including interest, fees and penalties, should not exceed 36 per cent per year.
Thida Kaewbootta, director of Fast Money Company, one of the firms that received a nano-finance permit yesterday, said her company would begin offering loans today under a budget of Bt500 million. It hopes to limit the rate of non-performing loans to 10 per cent.
Fast Money Co is a subsidiary of Srisawad Power 1979.
“Debtors must have a tangible way to pay back their loans, and the process of loan consideration will concentrate on the objective [for the funds] and the borrowers’ ability to repay,” she said.
“There is no guarantee needed for a nano-finance loan, so the interest rate will be at the maximum 36 per cent that is allowed by the permit. But this rate is still lower than for a loan outside the system, so we expect a people to show a lot of interest,” she said, adding that the scheme should help eradicate the problem of loan-sharking.
Thai Ace Capital is also ready to offer nano-finance this month under a budget of Bt100 million. Sahapaiboon (2558) is expected to introduce the scheme next month, and Mackale Group in July.
Thitikorn has also set up a subsidiary called TK Ngern Tan Jai Co for its expansion into the nano-finance business.