Heng set to offer digital personal loan service

Consumer loan provider Heng Leasing and Capital Plc (Heng) is set to launch a digital personal loan service in November, with a focus on risk management for the new service.

Heng is in the process of applying for a digital personal loan license from the Bank of Thailand and is developing an IT infrastructure system in preparation for the launch of the digital loan service.

Sutharntip Phisitbuntoon, managing director of the company, said that during the initial phase of the new service, the company will focus on strong risk management to control asset quality.

As a result, the company will focus on offering digital loans to its existing customers.

To serve its digital lending service, the company is also improving its debt collection system to make it more centralized.

“The company has set a total investment budget for 2022 at 121 million baht, of which 75 million baht is allocated for IT investment. As we are currently in the digital era, all loan service providers have decided to provide digital loans, which increases competition in the business sector,” she said.

“While there is greater competition in digital lending services, controlling asset quality is a key driver rather than expanding lending. The company will pilot the service without an aggressive goal of lending growth, but will instead aim to control non-performing loans. [NPLs] at a satisfactory level,” Ms. Suthartip said.

This year, Heng aims to grow its loan portfolio by 25-30% from a total loan portfolio of 9.18 billion baht at the end of last year.

Total outstanding loans will increase to 11.50-12 billion baht this year, but digital loans are expected to be a small amount. The company aims to reduce the NPL ratio to 3.1% this year, from 3.4% in 2021.

Ms Sutharntip said the company also plans to focus on car title lending rather than car hire purchase lending over the 2022-23 period, in line with economic circumstances and demand for lending. .

Demand for new car sales and loans to buy them should slowly improve in line with the gradual recovery of the economy.

Meanwhile, consumers and small business owners still need extra cash for day-to-day expenses and business cash flow amid an uneven economic recovery. In this scenario, there are more opportunities in the area of ​​car title loans rather than auto lease-purchase loans.

Heng expects the share of car title loans to increase to 60% by 2023 from about 35% currently.