Central Retail Corporation Public Company Limited (CRC) has teamed with KASIKORNBANK (KBank) to offer a loan facility worth THB 5 billion under the “Loan Facility for CRC’s Suppliers” program with the aim of boosting liquidity for cash-strapped operators to brave the COVID-19 crisis. The first phase of this loan program has been approved, and loan will be disbursed by the end of May 2021.
Mr. Yol Phokasub, CRC Chief Executive Officer, noted that the COVID-19 pandemic has taken a devastating toll on the economy. SME operators are the main casualties. To alleviate their hardship, CRC is ready to help in providing loan support to crisis-hit SME entrepreneurs as quickly as possible. CRC has thus joined with KASIKORNBANK (KBank) to launch a sandbox program wherein the database of more than 4,000 trade partners and suppliers of Central Food Retail Co., Ltd. is used for credit underwriting by KBank via a digital factoring platform. Loan approval has already been granted to the first group of 1,000 SMEs. Until now, more than 70 percent of these suppliers have never gained access to soft loan. This innovative platform allows KBank to conduct loan underwriting with greater convenience and speed for enhanced efficiency at lower cost and risk. This loan model will be further applied with other CRC suppliers and other retail businesses. The initiative aims to enhance liquidity among cash-strapped SME entrepreneurs so that they can regain a solid footing.
Mr. Patchara Samalapa, KBank President, said that many entrepreneurs nationwide are being adversely affected by the COVID-19 pandemic, and all parties must join forces in offering immediate assistance to those affected. KBank has steadily introduced measures to assist business clients and thus ensure that their businesses can stay afloat.
Additionally, CRC and KBank have collaborated to find solutions for the problems and other needs of entrepreneurs who are CRC suppliers. The chief suppliers of CRC are mostly SMEs operating throughout Thailand that are presently facing liquidity problems brought about by the ongoing COVID-19 crisis. The solutions are intended to help enhance their liquidity as soon as possible.
Under this collaboration, KBank and CRC have introduced the “Loan Facility for CRC’s Suppliers” project, with the aim of providing 5 billion Baht in loans to bolster the liquidity of CRC’s suppliers, who are both existing and new customers of KBank. Presently, 3,500 of CRC’s suppliers are KBank’s existing customers, and they have a total of 86 billion Baht in loan limit with KBank. Financial assistance is being offered to them in two forms, as follows:
- Soft loan facility: KBank’s existing customers can borrow soft loans of up to 30 percent of their loan limit held with KBank. New customers can borrow soft loans of up to 20 million Baht for a maximum period of seven years. Borrowers are offed suspension of principal payments and they will be required to make interest-only payments for 24 months (without the need to make either principal or interest payments during the first six months) at the rate of 2 percent for the first two years. On average, interest rates will not exceed 3.8 percent during the first five years, and no front-end fees will be charged.
- Unsecured loan: Customers who are ineligible for the soft loan facility or have borrowed from other financial institutions can apply for loan of up to THB 5 million, fully guaranteed by the Thai Credit Guarantee Corporation (TCG), with a maximum loan term of seven years. Customers are offered suspension of principal payment for up to 12 months and pay only interest at the rate of MRR+3%, with a 2-year TCG fee waiver.
The collaboration between CRC and KBank allows financial aid provision to pandemic-hit customers at an accelerated pace. Presently, KBank has reached out to CRC trade partners and approved loans during the first phase of this program. Customers can make loan disbursement at the end of May 2021.
Mr. Patchara said, “Based on conversations with a majority of our customers, they have been affected by declining sales, order postponements and the necessity of payment term extensions for debtors. As a result, they are dealing with liquidity issues. CRC and KBank believe that this measure will help to address such concerns, solving customers’ current predicaments, and alleviating their financial burdens in a timely manner. We are touched and thankful for the prompt assistance that we have received from every party during this crisis.”
With regard to this collaboration, CRC and KBank hope to provide assistance to businesses in navigating the COVID-19 crisis. CRC’s suppliers interested in joining this program can contact the K-Biz Contact Center at 02-888-8822.