Kasikornbank (KBank) has joined hands with Carabao Group, the maker of Carabao Dang energy drink, on a plan to offer personal loans under the Kbao brand at Tookdee convenience stores.
The move is part of their partnership announced in July to invest in expanding Tookdee convenience stores, which are under the Carabao group.
Under the partnership involving part of the Kbao service, KBank and the Carabao conglomerate will set up a joint venture, Kbao Co, in which the bank will hold a stake of more than 50%, while Carabao group will own the remainder.
The service will offer both commercial and retail loans to the entire supply chains of Carabao Group.
In terms of retail loans, the joint venture has applied for a personal loan licence from the Bank of Thailand and plans to offer the loan under a "buy now pay later" (BNPL) model.
The joint venture is developing the technology infrastructure system of the Kbao service.
It expects the service to make its debut next year, said Chaya Chansmitmas, head of TeamX (CEO Office) at Carabao Group.
For the personal loan offering under the BNPL model, Kbao will grant loans to individual borrowers for buying goods offered by Carabao Group, including at Tookdee shops.
Normally owners of Tookdee stores provide credit to their retail customers when they buy goods at their stores. This traditional credit offer is the same as the BNPL concept.
The Carabao Group will utilise the technology infrastructure to support Tookdee shop owners' offering of their traditional services and their traditional credit offering to customers.
The Kbao financial service will be offered through both offline and online channels, depending on the financial behaviour of the borrowers.
The loan borrowers will have to be members of Tookdee stores.
The credit amount offered to them would depend on the Tookdee shop owners, who know their customers well because they live in the same communities, Mr Chaya said.
Mr Chaya said the credit line granted to the borrowers would be debited when the borrowers buy goods at Tookdee shops or Carabao cash vans, which are under the ecosystem of Carabao Group only.
The loan will neither be a cash handout nor a transfer of funds to the borrowers.
Given technology-based financial service, Kbao would grant more opportunities for individual borrowers, who are largely in the underbanked segment and live in remote areas, to better access a source of finance, he added.
He said the customers would receive greater convenience and a more reasonable interest rate compared with loan sharks.
Kbao's ceiling interest rate has been set at 25% per year in compliance with the central bank's regulations.
Mr Chaya said the lending service has yet to finalise its retail loan growth target, which should be in line with the expansion of Tookdee shops.
There are around 5,000 Tookdee shops at present and there is a target to increase the number to 10,000 at the end of this year before rising to 20,000 in 2023, and 30,000 in 2024.
