MICROCAPITAL BRIEF: Krung Thai Bank of Thailand Downscaling to Offer Microfinance

The Krung Thai Bank Public Company Limited (KTB), a government-owned commercial bank in Thailand, recently announced that it has initiated microfinance operations by providing loans to lower-income people that do not have regular salaries [1]. The service is being offered in 20 unspecified areas as a pilot project for one year with the aim to expand to 200 areas in the following year. KTB expects this service to help keep “lower-income applicants away from loan sharks.” KTB will be using outside agents for customer service and debt collection. The interest rate for the microfinance loans has been set below 20 percent per year.

KTB also announced that it has restructured its small and medium-sized enterprise (SME) business operations to help improve the loan approval process and distribution. The details of the restructuring are not available.

By Nisha Koul, Research Associate

About Krung Thai Bank Public Company Limited (KTB): The Krung Thai Bank began its operation in 1966 following the merger of two government-owned banks. It is the only government-owned commercial bank in Thailand and has branches in all 76 province of the country and as of 2010, it reported total assets of THB 1,762 billion (USD 56 billion) and net income of THB 14.9 billion (USD 47.4 million).

Sources and Additional Resources:

[1] Bangkok Post, “KTB adopts microfinance,” http://www.bangkokpost.com/business/economics/272098/ktb-adopts-microfinance

MicroCapital.org story, December 19, 2011, “MICROFINANCE PAPER WRAP-UP: Poverty, Income Inequality, and Microfinance in Thailand; By Kelly Bird, Kelly Hattel, Eiichi Sasaki and Luxmon Attapich; Published by the Asian Development Bank,” www.microcapital.org/microfinance-paper-wrap-up-poverty-income-inequality-and-microfinance-in-thailand-by-kelly-bird-kelly-hattel-eiichi-sasaki-and-luxmon-attapich-published-by-the-asian-development-bank/

MicroCapital.org story, August 5, 2011, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Hold Workshop on “Equator Principles” for Thai Banks Regarding Environmental and Social Risk Management,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-hold-workshop-on-%E2%80%9Cequator-principles%E2%80%9D-for-thai-banks-regarding-environmental-and-social-risk-management/

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