CIMB Thai Bank (CIMBT) is set to join the information-based online consumer lending trend, rolling out the service in the first quarter of next year, says a senior official.
Onanong: Still relying on risk profile
Personal loans will be the first product launched on the bank's digital platform, said executive vice-president Onanong Udomkantrong.
In a pilot project, the bank will lend to limited groups who do not earn regular income to learn from and adjust lending criteria as needed, she said.
CIMBT will leverage data available on online channels, including from social media with loan applicants' consent, to analyse risks, Ms Onanong said, adding that the new product will allow a large group of people easier access to loans.
The bank is treading a similar path to Siam Commercial Bank, which plans to introduce its digital lending platform to the public in the first quarter of 2019, while Kasikornbank, Bangkok Bank and Bank of Ayudhya also aim to be first-movers in online lending.
Ms Onanong said CIMBT will charge interest for digital personal loans based on the borrower's risk profile, but not exceeding the 28% limit set by the Bank of Thailand.
Although digital lending will carry lower operating costs, other costs include marketing and risk, so all borrowers using the channel won't get cheaper rates than via traditional channels, she said.
Digital lending will intensify personal loan competition, and Ms Onanong said she wants to see operators compete fairly.
She estimates that CIMBT's new personal loans will reach 7 billion baht this year, falling short of the targeted 10 billion baht and below last year's 8 billion baht.
If the bank's new loan estimate holds, outstanding personal loans will decline by 1% to 13 billion baht by year-end.
The personal loan shortfall could be due to the central bank's market conduct principles that restrict product offerings to the public, Ms Onanong said.
"The macroprudential measure on unsecured loans will not take a toll on our personal loan operations, as we have shifted our focus to those earning at least 30,000 baht [a month] for a while and this group accounts for 98% of our personal loan portfolio," she said. "We are seeking ways to penetrate those earning 30,000 baht or below, and digital lending will be adopted for that purpose."
The Bank of Thailand has limited personal loan borrowers who earn less than 30,000 baht a month from being granted more than 1.5 times monthly income per creditor from up to three personal loan creditors.
The central bank tightened controls on unsecured loans to put a lid on household debt and rising bad loans. That measure has been enforced since September 2017.
Ms Onanong said the bank stands ready to make loans to low-income earners who have a good repayment track record, thanks to a more efficient credit scoring system.
CIMBT shares closed Friday on the Stock Exchange of Thailand at 0.80 baht, up one satang, in trade worth 129,110 baht.
