Ayudhya Capital Services Co Ltd, a personal loan and credit card service provider under First Choice brand, saw its personal loan approval rate fall by four percentage points to 39% after the Bank of Thailand's tighter regulations on unsecured loans came into effect from Sept 1.
The company's more stringent criteria on personal loans aimed at maintaining asset quality has lowered its approval rate, said Nayanee Peaugkham, managing director of Ayudhya Capital Services Co Ltd.
First Choice's personal loan approval rate stood at 43% in August.
Ayudhya Capital Services is an unsecured lending arm of Bank of Ayudhya.
"The reduction is in line with the company's forecast. We predicted the central bank's new regulations would hurt our new loan approvals by around five percentage points," she said.
According to a new set of regulations governing personal loans, borrowers who earn less than 30,000 baht are granted no more than 1.5 times monthly income per creditor, and those earning at least 30,000 are entitled to a maximum five times per creditor.
Those earning below 30,000 baht a month are also limited to three personal loan creditors, while there is no restriction in terms of the number of creditors for those earning 30,000 or higher a month.
Despite the tougher regulations, the company expects to achieve its loan growth and new customer base targets this year, mainly because of robust growth since early this year.
The firm is aiming for an additional 300,000 personal loan accounts in 2017, with 216,000 new accounts year-to-date. For personal loan growth, the company targets 69 billion baht in new loans this year, having already extended 48 billion year-to-date.
Ayudhya Capital's goal for outstanding personal loans this year is 48 billion baht. The figure sits at 47 billion baht at the moment, said Mrs Nayanee.
With the central bank's tighter regulations, the company's stronger risk management and internal criteria adjustment, non-performing personal loans inched lower to 2.9% of its total portfolio from 3% at the beginning of this year, she said. Its non-performing loan ratio is expected to remain below 3% this year.
The company yesterday launched a new loan product, Krungsri First Choice Care, that features free personal accident insurance worth up to 100,000 baht in sum insured.
