Siam Commercial Bank, the country's second-largest lender by assets, is set to introduce its digital lending service for small and medium-sized enterprises (SMEs) on the SCB Easy mobile banking platform next month.
In the initial stage, the digital lending service will be available only for the bank's existing customers and merchants who use the QR code feature called Mae Manee, said Pikun Srimahunt, SCB's senior executive vice-president and head of the SME segment.
Small clients who seek a credit line in the range of 5,000 to 2 million baht are the key target group, Mrs Pikun said.
About a million shops are receiving payment through the bank's QR code system, and tens thousands of merchants could potentially borrow via the digital channel.
SCB aims for 2 billion baht in new loans to be offered over the digital platform this year.
"Digital lending is expected to charge up to 18% a year or 1.5% monthly, compared with 3% a month by loan sharks," Mrs Pikun said. "Most important, it will widen opportunities for small enterprises seeking access to bank loans."
The innovative lending service will help boost the bank's total SME loan growth in the second half of the year.
The bank's SME loans amounted to 344.35 billion baht at the end of June, edging up 0.8% from the end of last year.
The sluggish loan growth could be partly due to a 20-billion-baht SME loan transfer to the wholesale loan business in the first half.
Mrs Pikun said the bank is keeping its SME loan growth target at 5-7% for the full year. Tourism is the key sector driving SME loan expansion in the second half.
In the meantime, SCB has joined forces with partners from the public and private sectors to launch SCB SME Key Connect -- a project aimed at improving the potential of businesses, starting with the hotel industry.
The bank also aims to double the hospitality sector's share of the loan portfolio to 10% of total SME loans outstanding by year-end.
Despite SME loan portfolio expansion, the bank aims to keep a lid on non-performing SME loans at 8.25% by the end of the year.
Bad loans in the SME segment have steadied but need more time to decline, given their nature as a lagging indicator, Mrs Pikun said.
SCB shares closed yesterday on the Stock Exchange of Thailand at 144.50 baht, down 1.50 baht, in trade worth 1.22 billion baht.