Fintech firm Peer For All (PFA) plans to offer a peer-to-peer (P2P) lending service in the final quarter of 2022.
PFA is jointly owned by two SET-listed companies -- Aqua Corporation Plc and News Network Corporation Plc -- which own 60% and 40%, respectively.
PFA will take over the P2P lending platform NestiFly Co, which was the first P2P lending platform in the country to receive a business licence from the Bank of Thailand, according to the statements issued by PFA's two major shareholders to the Stock Exchange of Thailand yesterday.
PFA expects loan growth on the digital platform of 3 billion baht in 2023, said Aqua's executive director and managing director Chaipipat Kaewtrirat.
In the initial stage, PFA plans to offer secured loans, which will require borrowers to use their SET100 stocks as loan collateral. The company set a loan-to-value (LTV) ratio in the range of 30-50% to control risk for the digital loan service.
For this business model, SET investors are the major customer target for PFA's loan service.
As the platform requires shares as collateral, if there is higher risk when share prices are falling, the platform will require additional collateral from borrowers or demand faster loan repayment, or force the borrower to sell stocks to repay the loan, depending on the LTV ratio of the borrower, said Mr Chaipipat.
The P2P lending platform does not set loan objectives. It only asks if the loan is for individual or business purposes.
The P2P interest rate for loans is in a range of 3.5-4% per year with loan maturity at 3-9 months, and stipulates a maximum credit line of 50 million baht in line with the P2P licence.
The platform does not set a minimum credit line.
He said the next step for PFA is to expand its requirement to allow for other types of loan collateral in addition to stocks. These would include real estate and cars.
The company plans to offer unsecured loans in the next phase. This move depends on the company's business growth and the central bank's approval.
"We are also interested in the central bank's upcoming licensing of virtual banks, but we are awaiting clearer directions from the regulator," said Mr Chaipipat.
PFA plans to offer several financial services on its P2P digital platform, including insurance and virtual banking.