Consumer loan provider Heng Leasing and Capital Plc (Heng) is poised to launch a digital personal loan service in November, with the focus on risk management for the new service.
Heng is in the process of applying for a digital personal loan licence from the Bank of Thailand and is developing an IT infrastructure system in preparation for the launch of the digital loan service.
Sutharntip Phisitbuntoon, the company's chief executive, said during the initial stage of the new service, the company would focus on strong risk management to control asset quality.
As a result, the company will concentrate on offering digital loans to its existing customers.
To serve its digital loan service, the company is also improving its debt collection system to be more centralised.
"The company has set a total investment budget for 2022 at 121 million baht, of which 75 million baht is allocated for IT investment. As we are currently in the digital era, all loan service providers have been moving to provide digital lending, which will increase competition in the business area," she said.
"Although there is greater competition in digital loan services, asset quality control is a key factor rather than loan expansion. The company will pilot the service without an aggressive loan growth target but will instead aim to control non-performing loans [NPLs] at a satisfactory level," Mrs Sutharntip said.
This year, Heng aims to grow its loan portfolio by 25-30% from a total loan portfolio of 9.18 billion baht at the end of last year.
Total loans outstanding will increase to 11.50-12 billion baht this year, but digital loans are only expected to represent a small amount. The company aims to reduce the NPL ratio to 3.1% this year from 3.4% in 2021.
Mrs Sutharntip said the company also plans to focus on car title loans rather than auto hire purchase loans during the period 2022-23 in line with economic circumstances and loan demand.
Demand in terms of sales of new cars and for loans to purchase them is expected to slowly improve in line with gradual recovery of the economy.
Meanwhile, consumers and small entrepreneurs still need additional liquidity for daily spending and business cash flow amid an uneven economic rebound. Under this scenario, there are more opportunities in the area of car title loans rather than auto hire purchase loans.
Heng expects the car title loan portion to increase to 60% by 2023 from around 35% at present.