LENDING & CREDIT | Cesar Tordesillas, Thailand

Thailand's Kiatnakin to increase SME lending 10-fold

Kiatnakin Bank hopes to boost its SME lending portfolio ten-fold through its newly-acquired knowledge gained from its merger with Phatra Capital.

From the current Bt1 billion SME lending portfolio, the bank hopes to reach Bt10 billion in three years.

Phatra has expertise in the investment and financial-advisory field, which the bank hopes to utilise.

According to Head of retail banking Siri Senajak, the bank next year would strongly promote lending products for small operators that are already KK hire-purchase, or lease-to-own, borrowers.

The bank has upgraded its systems to prepare for further penetration of the SME market, he said.

KK will start providing loans to hire-purchase borrowers because 80 percent of these customers are small and medium-sized enterprises, which is considered sufficient for expanding the bank's SME lending significantly within three years.

The bank will also offer personal loans to its hire-purchase clients, he added.

Hire-purchase clients will be the initial focus of the bank's cross-selling of products. Providing additional loan products to existing customers will also help save costs, resulting in lower interest rates, Siri said.

KK's retail banking portfolio stood at Bt114 billion last year, with lending from hire-purchase accounting for 80 percent and the remainder coming from SME and personal loans.

With such a high proportion of hire-purchase regarded as a business risk, the bank will gradually give more importance to SME and personal lending, starting next year, he said.

As part of this move, KK will offer personal loans to hire-purchase customers who have made at least two years of instalment repayments.

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