Consumer credit provider Krungthai Card Plc (KTC) expects to miss its loan growth target for car title loans because of the impact of the pandemic.
The company introduced a car title loan product called P Berm in May 2020 after the Covid-19 outbreak began in Thailand.
Krungthai Card set a car title loan growth target of 1 billion baht for 2021 because it did not expect further outbreaks, said Rueankeaw Kasemsavatsri, vice-president for KTC P Berm loan business.
The third wave and the government's lockdown restrictions were the reasons for the missed goal, though the company kept its existing target, said Ms Rueankeaw.
Customers showed weaker debt repayment abilities during July and August, she said.
The company has been offering debt restructuring measures to Covid-affected clients to help them overcome hardships, said Ms Rueankeaw.
Phichamon Jitpentham, KTC's senior vice-president for personal loan business, said the non-performing loan ratio for the personal loan portfolio covering both personal loans and car title loans was at 3% as of June this year.
The company aims to maintain it at the existing level by the end of 2021 through debt restructuring measures, she said.
KTC provided debt aid measures, including lower monthly instalment payments, loan maturity extensions, and conversions of short-term loans to long-term loans for around 35,000 customers.
The company also tightened loan approvals and readjusted loan criteria in line with higher credit risks, said Ms Phichamon.
As a result, new customers are finding it harder to access loans, while existing clients receive lower credit lines as an instrument to control asset quality.
"With the tougher criteria, the approval rate for personal loans has declined a little from 30% of total applications," she said.
"Hopefully, the situation will improve after daily new infections decrease and the government eases lockdown measures."
Ms Phichamon said KTC set a flat growth rate for its personal loan target this year to maintain the total personal loan portfolio at 29.4 billion baht by the end of 2021.
