Digital lending pays off for banks as platforms expand rapidly
Digital lending platforms run by the large commercial banking groups Kasikornbank (KBank) and SCB X are posting strong growth, in line with changing consumer behaviour in the digital era.
Line BK, a social banking platform collaboration between KBank and Line Corporation, has expanded its user base to more than 4.7 million as of last month, with digital loan accounts of 590,000, an increase of 81% year-on-year.
For the first half of this year, the company grew the value of its total outstanding loans to 18 billion baht, having granted digital loans worth a total of 43 billion baht since Line BK's launch in October 2020.
Tana Pothikamjorn, chief executive of Kasikorn Line, which operates Line BK, said Line BK offers two types of consumer loan products: personal loans called Credit Line and a nanofinance offering called Nano Loan.
Line BK plans to expand its digital loans to a new customer base to give the underbanked and unbanked segments better access to financial services, he said.
For the first half of 2022, the number of Line BK's deposit accounts rose 73% year-on-year to 5.6 million, with total money transfers worth 78 billion baht. In addition, the company issued 2.6 million debit cards, rising 93% year-on-year.
Mr Tana said the company would continue to develop new businesses in the second half of this year. Line BK plans to add more partners, especially in the debit card business, and build up a stronger ecosystem using the partnership strategy, he said.
New features are also planned on Line BK to better respond to clients' needs, said Mr Tana.
At the beginning of this year, Line BK signed an agreement with Muang Thai Life Assurance to develop a channel to promote life and health insurance services via Line BK's Official Accounts. This marked the first step in Line BK becoming an insurance broker, with services expected to launch on this Line channel in 2023, according to the business expansion plan.
Meanwhile, SCB Abacus, SCB X's digital lending platform, has achieved Series B funding worth US$20 million (roughly 700 million baht) from both local and international shareholders, including SCB X Group, Openspace Ventures, Vertex Ventures Southeast Asia, and CAI Partners.
The proceeds will be used for business expansion and growing digital loans on the SCB Abacus platform under the marketing name MoneyThunder, said Sutapa Amornvivat, SCB Abacus chief executive.
She said the company aims to serve lower-income earners who have faced difficulties in applying for bank loans, making it easier for them to access funding.
There have been more than 8 million downloads of MoneyThunder, of which more than 50% of users were rejected for bank loans, and around 40% had been loan shark borrowers.