Line BK targets 1m digital loan customers in first year

Line BK targets 1m digital loan customers in first year

Mr Tana says applicants need money and will go to the channels where loans are available.
Mr Tana says applicants need money and will go to the channels where loans are available.

Line BK, a social banking platform in Thailand formed by a collaboration between Kasikornbank (KBank) and Line Corporation, plans to increase its customer base to 1 million during the first year of business operation.

There have been 6,000-7,000 applications per day demanding digital loans through Line BK, a financial feature on Line app, after the official launch last week.

The application number is far higher than the existing expectation and applications are undergoing an approval process, said Tana Pothikamjorn, chief executive of Kasikorn Line.

"Basically, loan applicants are those who need money. They will access any channel that allows them to obtain loans, so this leads to higher loan applications," he said.

Kasikorn Line will also continue to analyse borrowers' financial behavior.

Line BK is operated by Kasikorn Line, a joint venture between Kasikorn Vision (KBank's subsidiary) and Line Financial Asia (a subsidiary of Line Corporation). Line BK offers savings, money transfers and personal loans under the Bank of Thailand's two financial licences, including personal loans and nanofinance.

In the initial stage, Line BK is offering digital loans under the personal loan licence, for which the central bank requires borrowers to provide bank statements for loan product applications.

The regulator has set the ceiling interest rate for the loan product at 25% per year.

Line BK plans to offer digital loans under the nanofinance licence next year, whereas the central bank does not require borrowers' to provide statements for loan applications. Nanofinance digital loans are anticipated to help boost loan expansion for Line BK.

"Under Line BK's business model, we will offer customers a credit line first and allow them to withdraw loans as required, similar to the credit card business model," he said.

Mr Tana refused to disclose the loan growth target, but aims to be among the top five consumer loan providers in the Thai market within five years.

Line BK aims to maintain non-performing loans at no more than 5% of total outstanding loans.

The underbanked and unbanked clients, whose monthly income is below 15,000 baht, are the key customer segment.

The underbanked or unbanked make up 60% of Thais, said Mr Tana.

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

Unbanked people are those who cannot access any banking products or services, not even deposit accounts.

Thailand has 50 million mobile internet users and 52 million active social media users.

There are 93 million mobile or internet banking accounts.

Line has 47 million users in Thailand, while KBank has 16.5 million users, 13 million of whom use the K Plus app. The bank reported 1.7 billion baht in mobile banking transactions during the first half of this year.

Line BK also plans to offer mutual fund and insurance products in next two years, said Mr Tana.

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