Digital loan providers are emphasising risk control because of economic uncertainties, the continued outbreak and tougher competition from new players.
Line BK, a social banking platform collaboration between Kasikornbank (KBank) and Line Corporation, is focusing on asset quality for 2022 rather than loan growth amid the economic uncertainties, especially the Omicron outbreak, said Tana Pothikamjorn, chief executive of Kasikorn Line Ltd.
The company will continue to tighten new loan offerings, meaning its loan approval rate could fall in line with economic circumstances and the credit risk of applicants, said Mr Tana.
The company is monitoring the impact of the Omicron variant after the Delta variant adversely affected customers, he said.
Line BK, the country's leading digital loan provider, reported in July last year its loan approval rate was around 20% of total applicants, while non-performing loans (NPLs) stood at 2% of total debt outstanding.
Presently its NPLs increased to more than 3% of total debt outstanding, said Mr Tana.
The company did not set a specific target for loan growth, NPL ratio or loan approval rate for this year, he said.
Line BK plans to adjust the business in accordance with the economic situation, said Mr Tana.
He said Line BK aims to improve its overall risk management process, which covers loan analysis and its credit scoring system, to better control asset quality.
Loan demand has been increasing because of the pandemic.
As of December 2021, Line BK's total users numbered 3.9 million and it has granted digital loans totalling 27 billion baht after starting in October 2020.
Monix Co Ltd, a digital loan provider under Siam Commercial Bank (SCB), also plans to expand prudently, balancing loan growth and asset quality.
The company launched a digital personal loan product called Finnix Ignite in addition to its existing digital nanofinance product.
Finnix Ignite focuses mainly on salaried employees with a minimum income of 30,000 baht per month. It offers a maximum credit line of 1.5 million baht.
In the initial stage, Finnix Ignite is offered only to existing SCB customers in order to control asset quality, said chief operating officer Thiranun Arunwattanakul.
Monix provides digital lending, including nanofinance products, on its mobile app Finnix.
The company's nanofinance lending grew to 6 billion baht last year, exceeding its target of 5 billion.
There were 5 million downloads of its digital lending app in 2021, up from 3.5 million in May 2020.
Krungthai Bank (KTB) has been testing digital loan service through its mobile banking app, Krungthai Next.
In addition to the bank's customers, KTB also offers digital loans to users of the Pao Tang and Tung Ngern apps, both developed by KTB.
Pao Tang and Tung Ngern were developed to support the government's stimulus and subsidy schemes. Pao Tang has 34 million total users.
KTB offered the digital loans to all segments of Pao Tang and Tung Ngern users as a pilot project.
Given the new service and client base, the bank plans to gradually explore the market using strong risk control, said Krairit Euchukanonchai, KTB vice-chairman.