Tisco banks on automobile refinancing, microfinance

Tisco banks on automobile refinancing, microfinance

Vasin Sivasirikarul, left, marketing director of Hi-Way Co, Supachai Boonsiri, centre, managing director, and Yuttpong Sriwong, head of retail banking at Tisco Bank, are upbeat about Hi-Way's prospects. (Photo by Darana Chudasri)
Vasin Sivasirikarul, left, marketing director of Hi-Way Co, Supachai Boonsiri, centre, managing director, and Yuttpong Sriwong, head of retail banking at Tisco Bank, are upbeat about Hi-Way's prospects. (Photo by Darana Chudasri)

Tisco Bank expects rapid growth in automobile refinancing loans this year due to the large mass of people unable to access lending sources at a reasonable cost.

Tisco microfinance subsidiary Hi-Way Co has offered a product called Somwang Ngern Sang Dai for two years, said Supachai Boonsiri, managing director of Hi-Way.

"We expect heavy growth in car title loans, raising our outstanding loans this year to 8 billion baht," he said.

Hi-Way was established 38 years ago and operates a motorcycle leasing business.

"This is a high-potential business," said Mr Supachai, adding that the Thai central bank reported 1.34 million households were unable to access financial resources at a reasonable cost.

He said Hi-Way's loan product served these target households.

For example, the company offers automobile refinancing to clients by requesting only that the vehicles' titles be held by the company without requiring clients to transfer ownership of the car to the company like car title loans normally demand. Hi-Way also provides loans without a guarantor.

Somwang Ngern Sang Dai offers loans at up to 150% of the appraisal price, which is relatively higher than normal car title loans.

Approvals can be made within an hour, with a flat interest rate beginning at 0.55% a month.

"Our loans that do not require a title transfer have been the key to our success over the past two years, as clients still own the car, so they take care of it," Mr Supachai said. "If they want to sell it later, the valuation will not drop as often happens with second- or third-hand car sales."

Last year the company's outstanding microfinance loans rose by 29% to 3.8 billion baht from 2.9 billion a year earlier.

Cars, pickups and trucks contributed 95% of the total loan portfolio, with motorcycles making up 5%.

Its customer numbers rose 40.6% in 2014 to 35,407 accounts, up from 25,191 from 2013. Upcountry customers represent 65% of the total, with 35% in Greater Bangkok.

This year the company will be more aggressive in Greater Bangkok, Mr Supachai said.

The company plans to open 20 more branches in 2015, bringing the total to 120. It also expects to launch 10 new microfinance mobile units that can offer loans and credit approval, similar to full-service branches.

"The mobile credit units will work well in accessing small communities and high-density residential areas," Mr Supachai said.

The company has more than 500 employees on its payroll.

TISCO shares closed yesterday on the SET at 46.25 baht, down 25 satang, in trade worth 48.6 million baht.

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