BAAC hopes demand for loans recovers

BAAC hopes demand for loans recovers

The Bank for Agriculture and Agricultural Cooperatives (BAAC) hopes that demand for its loans will pick up in the second half of its accounting year after the country's reopening on Nov 1, said president Tanaratt Ngamvalairatt.

If demand for loans picks up, the bank is likely to meet its lending target of 57 billion baht for the entire accounting year, which runs from April 1 to March 31, he said.

He said demand for farm produce is likely to increase following the country's reopening, which will encourage farmers to resume production plans. This will prop up the demand for BAAC loans by the farmers in the second half of its accounting year.

BAAC loans expanded by 8.99 billion baht during April 1-Sept 30, 2021, which is the first six months of its accounting year, representing only 16% of the total loan target of 57 billion baht.

He added that the bank lowered its loan target for the year from 69 billion baht and that the current target of 57 billion baht is the lowest target for the past five years.

The country's lockdown led to a decline in economic activities, which resulted in falling demand for farm produce.

Farmers have also received financial assistance from the government to mitigate the pandemic impact. These factors impacted the BAAC's loan growth during the first six months of the accounting year.

BAAC's non-performing loans (NPLs) as of September stood at 4.2% of total outstanding loans of 1.596 trillion baht, up from 3.9% the previous accounting year.

Mr Tanaratt believes that NPLs will drop to 4% at the end of the accounting year.

He said the BAAC has adopted the duo-transformation policy by maintaining traditional banking services and embracing digital transformation at the same time.

The former is to serve customers who are accustomed to traditional banking services and practices, especially those living in rural areas, while the latter aims to tap the young tech-savvy generation.

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