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Thai Credit Retail Bank to apply for microfinance license

Thai Credit Retail Bank (TCRB) is planning to apply for a license to offer microfinance in 2014 as part of its strategy to expand business.

Thai Credit Retail Bank (TCRB) is planning to apply for a license to offer microfinance in 2014 as part of its strategy to expand business.

TCRB is a retail bank with a focus on small loans. It charges annual interest rates of 9-15% for small loans, with a maximum credit line of THB5m ($156,100).

The lender also plans to offer a maximum credit line of THB150,000 ($4683) for microfinance, with a maximum annual interest rate of 35%.

The move follows the recent decision by the Finance Ministry and the Bank of Thailand to allow interested parties to apply for microfinance licenses from early next year.

TCRB managing director, Roy Agustinus Gunara, said that credit lines and interest rates differentiate the bank’s small loans from microfinance.

"Our small-loan clients are largely self-employed business owners with collateral, while microfinance borrowers would be vendors who have no collateral," Gunara added.

"Knowing the customers’ loan purpose and their debt payment ability are important to control risks."

Besides this, other plans for 2014 include controlling of bad loans at 4% of its loan portfolio and maintaining a strong capital adequacy ratio at the existing level of 18.6% compared with the central bank’s requirement of 8.5%.

The bank also plans to expand its loans to THB10bn ($312.2m) or 60% of its loan portfolio in the next three year.