Kasikorn-Line offers loan options for unbanked

Kasikorn-Line offers loan options for unbanked

Mr Tana says digital lending will be available via the Line BK feature of the Line app.
Mr Tana says digital lending will be available via the Line BK feature of the Line app.

Kasikorn-Line, a joint venture of Kasikornbank and Line Corporation, plans to roll out personal loans and nanofinance on the Line platform in mid-2020, aiming for millions of borrowers in the initial stage.

The digital lending service will be available via the Line BK feature of the Line app, said Kasikorn-Line chief executive Tana Pothikamjorn.

The super-app has introduced the Line Bank brand for financial services in Japan, Taiwan and Indonesia.

In the initial phase, Line BK aims to acquire millions of borrowers from the existing 44 million Line app users in Thailand, Mr Tana said without specifying a time frame.

Line BK is taking aim at the underbanked and unbanked segments, especially small-business owners, self-employed clients and freelancers, as its main customers.

These groups find accessing bank loans difficult because of a lack of financial statements.

"With this pain point, Line BK will build new experiences for market segments to more easily access loans and other financial services under the data analytics of the digital platform," Mr Tana said.

Rates charged for digital loans are subject to central bank regulations, with the ceiling rate set at 28% for personal loans and 36% for nanofinance.

With information-based lending, borrowers will be charged rates based on their risk profiles.

Underbanked customers are defined as those with only a bank deposit account and no other basic financial products.

Unbanked people are those who cannot access any banking product or service, not even a deposit account.

In Thailand, underbanked and unbanked people represent 45% and 18% of the population, respectively.

Mr Tana said Line BK is paying close attention to the security of its financial services, bringing the system on a par with banking standards to build up consumer confidence.

According to the Finance Ministry's requirements, nanofinance operators can lend only for occupational purposes, with a lending limit of 100,000 baht per borrower and a ceiling interest rate of 36%.

Such operators can provide lending services nationwide.

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