Siam Commercial Bank (SCB) plans to offer clean loans to small businesses and self-employed customers through mobile app SCB Easy in the next two months as part of efforts to raise the number of digital banking users.
The credit line for the loans without collateral is expected to be capped at below 1 million baht for small and medium-sized enterprise (SME) customers, said Pikun Srimahunt, senior executive vice-president and head of the SME segment.
The bank has developed a new credit scoring system and adopted innovative technologies, particularly artificial intelligence and data analytics for digital lending analysis.
"Normally, loan access for SMEs and self-employed businesses is more difficult than for medium and large enterprises, given their higher risk profile and low loan collateral," Mrs Pikun said. "No collateral requirement makes it easier for them to access a source of finance."
The bank can charge higher interest rates under a risk-based pricing approach.
The interest rate for clean SME loans will be higher than the 5.5-6% rate imposed on SMEs.
For the initial stage, the bank has not set any target for SME digital loan growth.
Mrs Pikun said the bank wants 7% SME loan growth this year from its portfolio of 360 billion baht at the end of 2017.
For the first three months of the year, SCB registered no growth in outstanding SME loans.
But the bank expects to achieve its full-year loan growth target on the strength of more aggressive business strategies for the remainder of the year.
Under SCB's Going Upside Down strategy, digital technology development, high-yield loans and partnerships are key areas of focus.
The bank yesterday debuted five additional digital business partners for the SME business, bringing the total to 55. The bank plans to capitalise on its digital partnership network in expanding the SME customer base.
SCB has also launched business centres to create a sustainable SME ecosystem. The bank aims to open 50 new business centres by the end of the year, up from five branches at present, and 200 by 2020.
For its traditional branch network, SCB is looking to revamp 800 outlets under three models -- SCB Express, business centre and investment centre -- halving the total number of outlets to 400 by 2020.
SCB shares closed yesterday on the Stock Exchange of Thailand at 137.50 baht, up 1.50 baht, in trade worth 577 million baht.
