GSB's new chief vows to expand microfinance

BANKING

The newly appointed president of the Government Savings Bank (GSB) will continue a major policy of its former head by aggressively expanding its microfinance business spearheaded by its People's Bank project.

Voravit Chailimpamontri, who took up the post last month, said microfinance is a core strength of the bank and benefits should be maximised through expansion.

Microfinance will be an option for people that were forced to rely on non-system lenders and being charged interest as high as 5-10% per month.

The GSB charges these debtors interest of only 0.5% per month for credit of up to 100,000 baht.

The People's Bank project was set up 12 years ago to serve people who cannot obtain loans from the formal financial system.

"Outstanding loans for microfinance alone now stand at 46 billion baht, which is still relatively low. I've assigned senior management to come up with a new target and a strategic plan for achieving it, as I want to see our microfinance portfolio increase more," said Mr Voravit.

Non-performing loans for the People's Bank scheme stand at only 2.53%, far below the average of 10% in the overall retail loan sector.

In the first 11 months, the GSB posted a net profit of 22 billion baht, higher than the full-year target of 19.6 billion.

Assets stood at nearly 2 trillion baht, with outstanding deposits of 180 billion and outstanding loans of 190 billion.

Mr Voravit does not expect interest rates to change much next year.

"They may marginally decline in line with the Monetary Policy Committee's lowering of the policy interest rate this last time," he said.

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Article source: http://www.thethailandlinks.com/2012/12/16/gsbs-new-chief-vows-to-expand-microfinance/