Loan applications through K-Plus, a mobile banking app under Kasikornbank (KBank), have declined by around 20% after the bank slowed its lending growth via the digital platform last year.
According to Supreecha Limpikanjanakowit, the bank's executive vice-president, KBank has reduced its promotion of consumer loan borrowing to control the asset quality since last year, amid elevated household debt and higher credit risk. As a result, both loan applications and approvals via K-Plus have declined by about 20%.
Most loan applicants via K-Plus belong to the mass market segment, including salarymen and freelancers, particularly payroll clients and first-time jobbers.
The bank continues to offer loans to selected customers with strong repayment abilities, helping them access funding sources and supporting their liquidity needs.
In the light of an uneven economic recovery and high household debt, Mr Supreecha said KBank encourages K-Plus users to pay more attention to personal financial planning to improve their financial discipline and loan accessibility.
The bank also promotes the use of saving, investment and insurance products among K-Plus users to enhance personal financial planning, contributing to the bank's fee-based income from the digital channel.
Recently, KBank's chief executive Kattiya Indaravijaya said the bank aims to enhance its credit scoring and risk management systems to elevate the asset quality of its digital loan services. As a result, KBank has opted to slow down the growth of its digital personal loan business to refine its business model and improve the quality control of its loan products.
"Despite the slowdown in digital loan growth, K-Plus users have continued to increase. The number of users of the mobile banking app grew by around 1 million in the first half of this year compared to the end of last year," said Mr Supreecha.
KBank, the country's third-largest lender by total assets, leads the industry in mobile banking apps with 23 million K-Plus users. New users primarily include first-time jobbers and payroll employees, both local and migrant. KBank also holds a significant market share in the payroll business catering to migrants.
However, Mr Supreecha noted that the growth rate of K-Plus users is expected to slow, mainly due to the high base effect. Nevertheless, banking transactions via K-Plus continue to increase, representing around 35% of the market share compared to KBank's overall market share of 20%. Additionally, the bank has expanded K-Plus services to regional markets, including Laos, Vietnam and Indonesia.
In Vietnam, K-Plus users have grown to around 2 million. Meanwhile, KBank has synergised K-Plus with MEB, the digital banking app of its Indonesian partner, Bank Maspion, to improve digital banking services for customers.
