Bangkok--13 Oct--KASIKORNBANK
KASIKORNBANK offers factoring loans as another tool for customers’ efficient financial and risk management, in tandem with factoring loan service in the global market which has been widely used for a long period. The international market of factoring loan service totaled 1,650 trillion euro in 2010. In Asia, particularly Japan, China and Taiwan, 88 percent of companies use factoring products. KBank hopes the factoring business in Thailand will grow and become competitive domestically and internationally, with a growth target of 75 percent or 40 billion Baht.
Ms.Penchun Jarikasem, Executive Vice President, Finance & Accounting Group of PTT Exploration and Production Pcl. (PTTEP), said the factoring loan service is an alternative short-term funding for PTTEP apart from bills of exchange (B/E), overdraft loans and other short-term loans. PTTEP has entrusted KBank as one of the providers of without-recourse factoring loan in order to benefit from using trade receivables in efficient financial management. PTTEP and subsidiaries have signed agreements of without-recourse factoring loan with the Bank for a credit limit of 1 billion Baht. Apart from efficient financial management, PTTEP will also benefit from other financial services of KBank.
Mr. Songpol Chevapanyaroj, Corporate and SME Products Division Head of KASIKORNBANK, said factoring loan service is a popular financial product in the international business community among solid major customers with strong trade partners and adequate supply chain length including management of raw materials, production, packaging, and sales. The total international market measured 1,650 trillion euro in 2010. In Thailand, only 1 percent of the market uses factoring loan service, meaning lost opportunities in using the ultimate efficient financial management tool. Potential customers may have the misconception that in factoring trade receivables via factoring loan service, they will be perceived as having bad credit, being illiquid and selling their receivables at a discount.
Nevertheless, in Japan, China and Taiwan, factoring products are popular, with 88 percent of companies in these countries using this service. KBank is hoping to boost factoring loan service use in Thailand as has happened overseas. The service is a tool of liquidity management, a highly efficient tool in receivable management, and reducing operating costs. Factoring loans are granted with a precise credit objective and carry lower interest rates than general purpose loans. Thus, they are an efficient liquidity and receivable management tool for both large corporate and SME businesses.
KBank has been the leader in the factoring market for more than 20 years, with the top-ranked market share and 2010 factoring loan value at 22.50 billion Baht, accounting for 22 percent of the country’s total factoring loans at 100 billion Baht. In 2011, the Bank has enhanced factoring products in tandem with the standards adopted by the world’s leading banks by joining hands with more than 250 local and international financial partners and factoring organizations in 65 countries under the Factors Chain International (FCI). The Bank has also shortened the credit underwriting process, reduced the documentation process, offered rates suited to customer characteristics, and expanded service areas nationwide to support future business growth.
KBank is ready to provide diverse and complete factoring loan services, including with- and without-recourse factoring products, and global factoring or export and import factoring. These products are an option for financial management in all industries and all business life cycles. Each factoring product of the Bank will be specially designed as a financial tool in accordance with the needs of customers in each segment. The Bank has granted 22.50 billion Baht of factoring loans as of August 2011, a growth of more than 50 percent over the same period last year. This year the Bank is expected to grant factoring loans of 40 billion Baht as targeted, a growth of 77 percent from last year’s loan value.