Supalai, KBank to help smaller contractors maintain liquidity

The property business continues to grow, backed by domestic consumption, low interest rates and urbanisation. Property projects in Thailand are also of interest to foreigners because of the competitive prices and the upcoming Asean Economic Community. 

The above factors will boost the property sector by no less than 10 per cent next year, up from 5 per cent this year, said Supalai managing director Atip Bijanonda. The prospects for the sector are likely to be bright despite the lack of manpower faced by contractors.

Supalai is planning to increase its sales in the provinces to 20-25 per cent of the total from 15-20 per cent now in line with urbanisation upcountry. It is studying real-estate projects in Asean. 

It aims to refocus on detached houses and townhouses, which now constitute one-third of its portfolio, in the next few years based on the improvement of transport and infrastructure. The construction of detached houses will rely on small and medium-sized contractors rather than larger ones, which will handle the condominium projects. 

However, small and medium contractors lack manpower and financial liquidity. Therefore, the company and KBank have created a programme for this segment of Supalai’s contractors to ensure they can access financing without collateral and also enjoy a lower interest rate.

The company will recommend to KBank those contractors that have served Supalai for at least two years and have never abandoned a project partway through. 

Vasin Vanichvoranun, executive vice president of KBank, said it would grant financial credit to a contractor up to Bt3 million with interest at the minimum retail rate (MRR) plus 3 percentage points per annum for two years.

KBank expects to finance at least 100 Supalai contractors. The programme will encourage small contractors to enter the banking system instead of using loan sharks, he added.