Tisco Financial Group’s microfinance arm, Hi-Way Co, has set an ambitious target for auto loan growth of 30-40% this year, driven by stronger demand for loans in line with the the country’s economic recovery.
Hi-Way, which provides auto title loans under the Somwang Ngern Sang Dai brand, aims to increase loans in this category by around 30 to 40 percent this year.
The strong loan growth target for 2022 will be supported by the resumption of economic activities, which will encourage demand for loans, said the company’s managing director, Supachai Boonsiri.
The company had a total loan portfolio of 17.9 billion baht in 2021, down 0.7% year-on-year, mainly due to the impact of the Delta variant of Covid-19 in the middle of the pandemic, particularly in the third quarter of last year. . However, the situation has been improving since the fourth quarter of 2021.
Tisco informed the Stock Exchange of Thailand that Somwang had total outstanding loans in the first quarter of this year of 18.45 billion baht, up 3% year-on-year. Somwang’s loan portfolio represents 57.4% of Tisco Bank’s total outstanding auto loans. Meanwhile, Tisco Bank’s total car title loan portfolio in the first quarter of this year stood at 32.16 billion baht, a year-on-year increase of 1.5%.
Mr. Supachai said the company has mainly focused on helping customers who have suffered from the impact of the pandemic by launching several financial relief programs based on their capacity in terms of debt payment. These programs have improved the company’s non-performing loan (NPL) situation.
“We believe the Thai economy and our NPL ratio bottomed out in the third quarter of last year and both have recovered since the fourth quarter of last year,” he said.
The company classified its NPL ratio at 3% in the third quarter of 2021, but since then the ratio has been declining. Therefore, the company expects to contain the distressed debt ratio to less than 3% throughout 2022.
While setting an ambitious loan growth target for 2022 amid heightened competition in the automotive title lending market, the company plans to achieve this growth target through its expertise in this business area. At the same time, there is more room to grow the loan product against a backdrop of positive demand nationwide. The demand for auto title loans is stronger than the demand for loans to buy new cars, Supachai said.