Sucheera Pinijparakarn
The Nation April 9, 2013 1:00 am
Boonyong Tansakul, managing director of Singer Thailand, said the company succeeded in making profits in the past four years by focusing on selling house-brand home appliances, such as freezers and coolers, and vending machines, and extending instalment loans to households and traditional vendors.
Singer suffered a huge loss of Bt1.2 billion in 2006 from motorcycle leasing.
Income from lease-to-own instalment plans for traditional vendors who purchased a vending machine from the company showed steady growth of 25 per cent in the past two years, especially in upcountry and border provinces.
The upcoming Asean Economic Community will become a gold mine for local traders who adjust to deal with the massive purchasing power in border provinces, the company believes.
Singer has a bigger network upcountry, where it is well known as a direct-sales operator and the king of instalment plans. Since its earnings come from interest income and after-sales services, it should have clear models for direct sales, after-sales service and financing.
Singer last year set up two wholly owned subsidiaries called Singer Leasing (Thailand), to oversee credit and debt collection, and Singer Service Plus, to cover after-sales services.
The parent company transferred a Bt2.7-billion credit portfolio to Singer Leasing, which started operating in January. Singer Leasing will analyse borrowers based on records at the National Credit Bureau by using a credit-analysis programme developed by Singer Thailand.
The Credit Bureau will help improve financial discipline and the debt-repayment ability of borrowers because the programme cannot check whether customers are in debt to other non-banks.
Singer Leasing classifies its customers in two categories. One is good borrowers who pay instalments on schedule. These customers can ask for further leases without going through a complicated process.
The other is risky borrowers with a history of delaying payments. These customers have to be pre-approved before they can be considered for a lease.
About 90 per cent of Singer's customers opt for financing and 10 per cent pay in cash.
Of the total of 163,000 accounts, 40,000 are vendors or 40 per cent of the portfolio and 60 per cent are households.
The company will focus more on vendors because vending machines can help them generate revenue and boost the quality of customers.
"We hope the ratio of vendor and household borrowers will be 50:50 in the near future," Boonyong said.
Singer charges an annual interest rate of more than 30 per cent, higher than 28 per cent for personal loans.
The leasing company does not come under the supervision of the Bank of Thailand, but its interest rate is reasonable because it also offers its customers after-sales service and home delivery, he said.
Singer Leasing expects its portfolio will rise past Bt3 billion based on 170,000 hire-purchase accounts and the revenue-growth target of 15 per cent this year.
Last year, Singer netted Bt226.22 million on revenue of Bt2.96 billion.
Interest income from the leasing business accounts for 30 per cent of Singer's revenue.
Singer Leasing is expanding its line of vending products to tap vendors and sell non-Singer products to vendors and households. It is considering leasing pickup trucks to vendors for use in their business.
After undergoing organisational restructuring, Singer will emphasise its retail business through its dealers nationwide and take part in business-to-business auctions.
Latest stories in this category
Marriage Equality opm revolution tiger woods passover Florida Gulf Coast University Aaron Craft
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.