KTC to keep bad debt low amid rise in personal loan applications

KTC has the lowest rate of non-performing loans in the sector at 1 per cent, while the industry as a whole has NPLs of 5.2 per cent, Sudaporn Janwatanagool, executive vice president for personal-loan business, said yesterday.
While the economic slowdown has made consumers more cautious about spending, causing the overall personal-loan industry in January to expand by just 3.3 per cent to outstanding lending of Bt322 billion, the growth slowdown has been seen at banks rather than non-bank lenders, she said.
Personal loans from banks dropped by 1.9 per cent month on month in January to Bt156 billion, while loans by non-banks grew by 8.9 per cent to Bt165 billion.
KTC also witnessed growth of 8.9 per cent to Bt18.68 billion during the month, she added.
According to Bank of Thailand data, the personal-loan industry grew by 3.8 per cent to outstanding lending of Bt324 billion last year, with Bt157 billion of the total being loans from banks.
Banks witnessed lower growth of 1.7 per cent, while non-bank lenders saw growth of 9.6 per cent to Bt166 billion.
KTC’s personal loans increased 11.6 per cent to Bt18.58 billion last year.
The company targets growth of 15 per cent to outstanding lending of Bt20.11 billion by the end of this year.
Sudaporn said the personal-loan industry was regarded as being able to grow further, as reflected by the number of new players entering the industry.
Last year, two new players entered the market, tapping people with monthly incomes of Bt5,000 and Bt7,000 respectively.
KTC serves white-collar workers with monthly incomes of Bt10,000 and above, but most of its loan applications are from individuals with an income of Bt15,000 to Bt20,000 per month, as they are attracted by the company’s sales team offering a personal loan together with a credit card, she explained.
About 90 per cent of its customers are white-collar workers, and the remainder are self-employed, she added.
KTC has an overall customer base of 740,000, more than half of whom are active, with an average cash withdrawal per customer of Bt9,000-Bt10,000, which is unchanged from recent years.
The company hopes to attract 146,000 new customers this year, the same as last year, the executive said.
KTC plans to continue to build its upcountry customer base, which accounts for 65 per cent of its clientele, as this is where it has the greatest room for expansion.
Meanwhile, even though some players – especially the smaller banks – offer lower interest rates for personal loans, KTC’s annual interest rate is set at 26-28 per cent, as non-bank lenders have higher funding costs than the banks, Sudaporn added.