MTC Unfazed! Consumer Finance Market Competition Intensifies, Focuses on Motorcycle Registration Loans - Aims for Nationwide Presence, Targeting 30% Loan Portfolio Growth This Year

Muangthai Capital Public Company Limited (MTC) remains unwavering despite escalating competition in the Consumer Finance market, with major banks funneling subsidiaries to vie for market share. CEO, Chuchat Petaumpai, underscores clear customer segmentation, emphasizing strengths in releasing loans for motorcycle title loans. With an extensive branch network nationwide, the company aims to achieve a complete portfolio of 7,000 branches within three years. Notably, the recent flooding situation hasn't significantly impacted operations, bolstering confidence in achieving a 30% growth target for this year.

Chuchat Petaumpai, CEO of Muangthai Capital Public Company Limited (MTC), a leading player in the motorcycle title loans market, revealed that despite a bank's restructuring announcement to compete in the Consumer Finance sector through its subsidiary, concerns regarding its potential impact on MTC's operations were more sentiment-driven than material.

He highlighted that fundamentally, banks are already engaged in motorcycle title loans business through their subsidiaries. Therefore, the entry of a new company isn’t introducing a new player. Furthermore, MTC's strength lies in focusing on motorcycle title loans, distinctly different from banks concentrating on automobile loans. Hence, the new entrants won't significantly affect MTC's operations.

Additionally, contrasting the banking model of centralized branches primarily in urban areas, MTC's strategy emphasizes widespread distribution at the sub-district level. For instance, in Nakhon Ratchasima province, while the bank has only 22 branches, MTC operates 285 branches, covering 289 sub-districts. This strategy caters to customers who prefer localized services, especially in rural areas, where agriculture-based customers form a significant customer base.

Chuchat stated, "MTC doesn’t rest amidst competitive landscapes but perceives them as opportunities for continuous service enhancement. We are exploring online avenues targeting a growing customer base familiar with technology. We're developing a Hybrid Platform to shift some services, traditionally available only in branches, to an online platform, ensuring convenience for customers, and eliminating the need to physically visit branches. Importantly, this caters to newer customer segments already tech-savvy.

Regarding concerns from the recent flooding situation, MTC closely monitored its impacts. Some branches in flood-affected provinces like Nakhon Ratchasima, Sukhothai, Nakhon Sawan and Chaiyaphum faced minor setbacks as customers couldn't reach branches for loan applications. However, concerning repayment from the agriculture-based customer segment, MTC anticipated minimal effects as most crops were unaffected by the floods. Moreover, government aid for flood-affected farmers mitigated prolonged repercussions.

MTC maintains its growth target of 30% by the end of 2021 from an outstanding loan portfolio growth of over 26% in the last eight months, evenly distributed across all loan categories. Factors contributing to this growth include increased income levels among farmers, Thailand's economic recovery trend in the latter half of the year, and the demand for circulating capital for livelihoods. The company aims to sustain this growth target of 30% in 2022.

In alignment with its growth objectives, MTC remains focused on expanding its loan portfolio by adding more than 700 branches annually, targeting over 7,000 branches within three years. This expansion aims to transition informal debt into a formal system, fostering financial discipline among customers and ensuring sustainable growth for both the business and the community.