MTC Embraces New Financial Legislation - Removes Cap at 15% Interest, Allows Variable Fees

MTC Welcomes the Newly Revised Financial Service Providers Act, removing the interest rate cap at 15% and allowing for variable fees. 'Chuchat Petaumpai' applauded by analysts and investors, eases concerns, boosting stock prices.

Mr. Chuchat Petaumpai, CEO of Muangthai Capital Public Company Limited (MTC), disclosed that the Ministry of Finance has implemented measures to regulate financial service providers under the Financial Service Providers Act, openly listening to entrepreneurs' opinions within April 30, 2018.

This draft legislation is beneficial in standardizing and safeguarding financial service providers, protecting consumers. It allows vehicle title loans businesses, including motorcycles, cars and agricultural vehicles, to operate nationwide, specifically targeting registered companies or public companies, emphasizing fair market conduct, disclosing information and not capping interest rates at 15%. Instead, it permits interest rates to be calculated inclusive of service charges, penalties and monitoring fees, as deemed appropriate by the proposed committee. After this act passes through the council's deliberation, interested parties can apply for registration and licenses within 120 days after the act is announced in the Government Gazette.

Chuchat mentioned that foreign investors and analysts have relieved previous concerns, assuming the draft law would cap interest rates at 15% only. However, the significant content of this draft law does not specifically dictate a 15% interest rate but rather discusses how entrepreneurs can calculate interest rates along with other service charges, following the committee's recommendations.

Consequently, the stock price of Muangthai Capital Public Company Limited has responded positively, surging by more than 20% from its lowest price.

Additionally, earlier analysts from Bualuang Securities had estimated MTC's fair price at 52 baht.