HEADLINES [click on headline to view story]:

Bank to offer more loans to the public, plus loan restructuring

Economic confidence indexes continues to slump

Second-hand houses still in greater demand

Bank to offer more loans to the public, plus loan restructuring

Saksit Meesubkwang

Art Siripin, director of the Government Savings Bank (GSB), Region 7, Chiang Mai Office, has announced it will run a project to assist the general public with the introduction of an asset conversion plan. Loans will also be available for people wanting to open food shops. The GSB, Region 7 has also devised a plan to restructure loans for people who have been unable to repay their debts.

Art Siripin, director of the Government Savings Bank (GSB), Region 7, Chiang Mai Office.

Art said that since the Bank was launched in April, 2001, it had given loans and credit of about 1.17 billion baht to 56,300 clients. 847 million baht in loans were given to 4,357 businesses and investors since June, 2002.

The asset conversion program has been introduced as a pilot project in Chiang Mai on January 1 through Chiang Mai Municipality and the Bank plan to provide loans of 5 million baht to 96 traders at the Chiang Mai night bazaar. Of the 50 operators at the shops and stalls in the Doi Suthep-Pui National Park who have taken out loans, 14 had applied for 400,000 baht.

Of the 34 operators at Maesa Waterfall National Park in Chiang Mai’s Mae Rim district, 12 had applied to the GSB’s Mae Rim branches for loans totalling about 750,000 baht.

The project to restructure the public’s bad debts marked the Bank’s responsibilities in the five provinces, he added. “This is an implementation project for the 30,995 poor people who have registered on the poverty list. About 16,027 of them applied for loans totalling 300 million baht. “However their applications are currently being screened for credit approval,” he said.

Economic confidence indexes continues to slump

All of Thailand’s economic confidence indexes are continuing on a downward spiral despite attempts by the government to put a brave face regarding the nation’s growth prospects, according to new research published September 9. The research by the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce shows that the overall economic confidence index for August dropped to 92.0 points, compared to 95.2 points in July.

Confidence in employment opportunities slid from 91.1 points to 88.1, while confidence in future earning capacity slumped from 108.6 points to 106.2.

The report said the index was likely to fall further over the coming months despite the positive factors in August such as expansion of export growth and low interest rates. It said these factors could be offset in the future by rising fuel costs.

The center predicts the Thai economy will grow by only 5.5 percent next year, lower than government forecasts. It bases its forecast on export growth of 14 percent and the government’s decision to raise diesel prices in February next year. This, in turn, will push up the cost of goods, putting inflation at 4 percent. At the same time, the country is likely to record a trade deficit next year. (TNA)

Second-hand houses still in greater demand

Second-hand houses remain in greater demand in Thailand, as total sales of houses in the first half of this year reached more than 240 billion baht, according to a top banker. Napengpasaeng Krisanamara, the senior vice president of Siam Commercial Bank Public Company Limited (SCB), said the sale of houses in the first half of this year significantly increased by 52.1% to 243 billion baht.

He believes second-hand houses are in greater demand by the public since new house prices rose considerably upon higher construction material prices, and increased interest rates. He said the demand for residences was likely to continue to rise as housing loans extended by the bank in the January-July period were as high as 7.8 billion baht, and were expected to grow further.

Napengpaesaeng said SCB planned to place for sale its non-performance assets (NPAs) comprising of 560 items valued more than 890 million bath at a grand housing fair to be jointly held by the bank, Home Products Center, and B.C.T. Housing Co during September 29-October 3. He projected more than 100 million baht of NPAs would be sold off at the fair.

Currently, NPAs held by the bank totals 12 billion baht. The bank has targeted to reduce the assets by 3 billion baht this year.

To facilitate the NPA sale, the bank has offered a loan with a fixed interest rate of 1% in the first six months. After that, borrowers can opt for a fixed interest rate of 3.24% in the first year, 4.25% in the first two years, or 5.25% in the first three years without lending fees. Napengpaesaeng conceded that people were more selective in house purchases now that interest rates are rising. (TNA)