Tuesday, May 26, 2020

KTC awaits licence for nano, pico financing

Aug 07. 2019
KTC's chief financial officer Chutidej Chayuti /Photo by KTC
KTC's chief financial officer Chutidej Chayuti /Photo by KTC
Facebook Twitter

By Somluck Srimalee
The Nation

Krungthai Card Plc or KTC expects to get a licence for nano and pico financing from the Finance Ministry this month, the company’s chief financial officer Chutidej Chayuti said at group interview recently.

“We will establish two new companies to cover nano financing with a registered capital of Bt50 million and pico financing with a registered capital of Bt20 million. Both these companies will wait for a licence from the Finance Ministry, which is expected this month. We will then test the market for six months and manage our operating system before its launched in the market,” he said. 

He explained that nano and pico financing aim to meet loan demands from the lower-income group. 

“We don’t know about the market size but we believe the market is large enough for us to do business,” he said. 

Research by the Bank of Thailand and Kasikorn Research Centre show that loan-sharks had provided loans worth Bt640 billion by the end of 2018, covering nearly 5 per cent of the population’s total household debt, which stood at Bt12.83 trillion at the end of 2018, or 78.6 per cent of the gross domestic product.

Chutidej said that nano and pico financing were a means of helping lower-income people get low-interest loans compared to money borrowed from loan sharks. 

“Once we get the licence, this side of the business will start generating profits within two years,” he added. 

Since December 2017, the Finance Ministry has approved 33 licences for nano financing and 43 for pico financing nationwide.

As of March 31, 33 nano financiers have given out 1.91 million loans worth Bt30.66 billion. 

Nano financiers provide loans for small businesses, and loans are not more than Bt100,000 at an effective interest rate of 36 per cent per year. 

Pico financing, meanwhile, covers personal loans of no more than Bt100,000, while the interest rates are divided in two, 36 per cent for the first Bt50,000 and 28 per cent per year for the second Bt50,000. 

As of March 31, 43 pico financiers nationwide approved loans for 76,787 individuals worth Bt599.56 million.

Facebook Twitter
More in Business
Editor’s Picks
Top News